Which of the Following Statements Is True

question 26

Multiple Choice

Which of the following statements is true?

• A) A decrease in default risk on corporate bonds lowers the demand for these bonds, but increases the demand for default-free bonds.
• B) The interest rate on corporate bonds decreases as default risk increases.
• C) A corporate bond's return becomes less uncertain as default risk increases.
• D) As their relative riskiness increases, the interest rate on corporate bonds increases relative to the interest rate on default-free bonds.

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Definitions:

Stakeholders

Individuals or groups with an interest or concern in the success and activities of a business or project, including employees, customers, investors, and the community.

Stakeholder Audit

A systematic examination of how an organization's activities impact its stakeholders, and how these relationships affect the organization's performance and strategy.

Social Responsibility Profile

A summary or evaluation of how a company's operations impact social and environmental factors, reflecting its commitment to ethical standards and sustainability.

Corporate Performance

The assessment of a company's ability to achieve its goals, often measured through financial, operational, and strategic outcomes.