The Fact That Borrowers Sometimes Default on Their Loans by Declaring

question 67

Multiple Choice

The fact that borrowers sometimes default on their loans by declaring bankruptcy is directly related to the characteristic of a bond called

• A)credit risk.
• B)interest risk.
• C)term risk.
• D)private risk.

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Definitions:

Business Owners

Individuals or entities that possess and operate a commercial enterprise, assuming the risks and rewards associated with the business.

Altering

The process of making changes or modifications, often referred to in the context of adjusting or tailoring clothes, but can also apply broadly to adjustments in plans or designs.

Building

The act or process of constructing structures such as houses, offices, and factories.

Service Businesses

Service businesses are companies that primarily earn revenue through providing intangible products and services rather than selling physical goods. Examples include consulting firms, restaurants, and cleaning services.