The Portion of the Risk Premium That Is Based on the Ability

question 98

Multiple Choice

The portion of the risk premium that is based on the ability of the borrower to repay principal and interest is the ____ risk.

• A) maturity
• B) default
• C) seniority
• D) marketability

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Definitions:

Estimated Dividend

The predicted amount that a company is expected to pay out in dividends to its shareholders in the near future.

Constant Growth Rate

In finance, it refers to the steady rate at which a company’s dividends or earnings are expected to grow indefinitely.

Similar Stocks

Stocks of companies operating in the same industry or sector, often exhibiting similar price movements and trends.

Anticipated

The expected occurrence or expectation of an event, often used in the context of financial forecasts or income.