An Increase in the Riskiness of Corporate Bonds Will ________

question 67

Multiple Choice

An increase in the riskiness of corporate bonds will ________ the yield on corporate bonds and ________ the yield on government securities, everything else held constant.

• A) increase; increase
• B) reduce; reduce
• C) increase; reduce
• D) reduce; increase

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Definitions:

Sarbanes-Oxley Act

A United States federal law that set new or enhanced standards for all U.S. public company boards, management, and public accounting firms.

Public Companies

Companies whose shares are traded publicly on stock exchanges and are subject to regulatory oversight.

Independent Board

A corporate board of directors, the majority of whom are independent and not involved in the daily operations of the company, to ensure unbiased governance and decision-making.

PCAOB

The Public Company Accounting Oversight Board, a nonprofit corporation established by Congress to oversee the audits of public companies to protect investors.