The Higher the Risk Associated with a Bond Issue, the ________

question 21

Multiple Choice

The higher the risk associated with a bond issue, the ________ the interest rate the organization must offer investors.

• A) higher
• B) lower
• C) more stable
• D) less stable

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Definitions:

Acid-test Ratio

A stringent indicator of a company's ability to quickly convert its short-term assets into cash to cover short-term liabilities, excluding inventory.