Which of the Following Statements Is Correct

question 43

Multiple Choice

Which of the following statements is correct?

• A) All else equal, secured debt is more risky than unsecured debt.
• B) The expected return on a corporate bond must be more than its promised return if the probability of default is greater than zero.
• C) All else equal, senior debt has more default risk than subordinated debt.
• D) A company's bond rating is affected by its financial ratios and provisions in its indenture.

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Definitions:

Huntington's Disease

A hereditary disorder caused by a faulty gene on chromosome 4, leading to brain cell damage that results in severe physical and mental disabilities over time.

Fetus

A developing human from roughly eight weeks after conception until birth.

Epigastric

Pertaining to the area of the abdomen over the stomach.

Abdominopelvic Cavity

The body cavity that houses both the abdominal and pelvic organs, including the stomach, liver, intestines, and reproductive organs.