The Default-Risk Premium

question 93

Multiple Choice

The default-risk premium:

• A) is negative for a U.S. Treasury bond.
• B) is also known as the risk spread.
• C) must always be greater than 0 (zero).
• D) is assigned by a bond-rating agency.

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Definitions:

Free Territories

Free Territories can refer to regions or areas that were not under the control of any specific state or governance, often linked with historical contexts where autonomy was emphasized.

Commons Dilemma

A situation in which individuals or groups must balance their own interests with the public good, often involving shared resources.

Social Loafing

The tendency for individuals to reduce their effort when working in a group compared to when working alone.

Bystander Effect

A social psychological phenomenon where people are less likely to offer help to a victim when other people are present.