Why Do Spreads on HLT Loans Behave More Like Investment-Grade

question 69

Multiple Choice

Why do spreads on HLT loans behave more like investment-grade bonds than like high-yield bonds?

• A)They tend to be more junior in bankruptcy.
• B)They tend to have greater collateral backing than do high-yield bonds.
• C)Because no bank makes a market in this debt.
• D)Because securities firms do not make a market in this debt.
• E)They tend to have no covenant protection.

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Definitions:

Health Belief Model

A mental framework that interprets and forecasts health-related actions by considering the perceptions and convictions of people.

Transactional Model

A communication framework emphasizing the dynamic and reciprocal exchange of information between senders and receivers.

Lazarus and Folkman

Psychologists known for their development of stress appraisal and coping theory, which examines how individuals evaluate and manage stress.

Health Belief Model

A psychological model used to explain and predict health behaviors by focusing on the attitudes and beliefs of individuals.