If the Possibility of a Default Increases Because Corporations Begin

question 57

Multiple Choice

If the possibility of a default increases because corporations begin to suffer losses,then the default risk on corporate bonds will ________,and the bonds' returns will become ________ uncertain,meaning that the expected return on these bonds will decrease,everything else held constant.

• A)increase;less
• B)increase;more
• C)decrease;less
• D)decrease;more

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Definitions:

Elements

Fundamental components or essential parts that make up a larger system or concept.

Ethical Action

Behavior or conduct that is right, good, and beneficial to both the individual and society, based on ethical principles.

Consequentialism

A moral theory that judges the rightness or wrongness of an action based on the outcomes or consequences it produces.

Ultimate Goal

The primary aim or final objective intended to be achieved in any given endeavor or system.