A Flight to Quality Is Most Likely to Have Which

question 30

Multiple Choice

A flight to quality is most likely to have which of these effects?

• A)It will be more difficult for individual borrowers to borrow, but ease borrowing for businesses.
• B)It will be easier for both individuals and businesses that want to sell high-risk bonds.
• C)It will decrease the default risk premium that higher risk borrowers have to pay and may bring about economic growth.
• D)It will increase the default risk premium that higher risk borrowers will pay and may cause some businesses to cut costs.

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Definitions:

Rubber Stamps

Tools used to apply inked designs or impressions, metaphorically referring to giving approval without careful consideration.

Business Communications

The sharing of information between people within and outside an organization in a professional context.

Goodwill

An intangible asset representing the value of a company's brand, reputation, and customer relationships.

Business Communication

The sharing of information between people within an organization or between a company and its customers.