Which of the Following Statements Is FALSE

question 77

Multiple Choice

Which of the following statements is FALSE?

• A)Investors pay less for bonds with credit risk than they would for otherwise identical default-free bonds.
• B)Credit spreads fluctuate as perceptions regarding the probability of default change.
• C)Credit spreads are high for bonds with high ratings.
• D)We refer to the difference between the yields of the corporate bonds and the Treasury yields as the default spread or credit spread.

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Definitions:

Union Membership

Refers to the affiliation of individual workers with organized labor unions which advocate for the rights, wages, benefits, and working conditions of their members.

Declined

A term referring to a decrease or rejection in context, whether in numbers, agreement to proposals, or the status of something.

Industrial Revolution

A period of major industrialization that took place during the late 1700s and early 1800s, transforming economies that had been based on agriculture and handicrafts into economies based on large-scale industry, mechanized manufacturing, and the factory system.

Steam Engine

A steam-powered engine that executes mechanical tasks, significantly contributing to the Industrial Revolution by operating factories, locomotives, and maritime vessels.