Which of the Following Risks May Be Included in the Spread

question 10

Multiple Choice

Which of the following risks may be included in the spread that compensates corporate bond investors for the assumption of additional risks over domestic government bond investors?

• A)Interest rate risk.
• B)Default risk.
• C)Foreign exchange rate risk.
• D)All of these.

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Definitions:

Parallelism

The condition of being parallel; in engineering, the degree to which parts or surfaces are aligned or parallel to each other.

Angularity

Angularity is a measure of deviation or conformity to a specified angle, often critical in part and assembly to ensure proper alignment and function.

Geometric Tolerancing

The specification of allowable variance in the geometric form and location of features on manufactured parts, allowing for precise and repeatable assembly.

Orientation

The arrangement or positioning of a part, component, or structure in relation to its surroundings.