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:

Transaction Exemptions

Specific situations or types of transactions that are exempted from the normal application of a law or regulation.

Regulation A

Regulation A is an exemption from the registration requirements mandated by the Securities Act, allowing smaller companies to raise capital through a simplified public offering process.

Qualification of Investors

The criteria that determine whether an individual or entity is eligible to invest in certain securities or investments.

Strict Liability

A legal doctrine holding an individual or entity responsible for damages or harm caused by their actions, regardless of negligence or intent.