Interest Rate (On Any Bond) Is Equal to

question 169

Multiple Choice

Interest rate (on any bond) is equal to

• A)Sum of risk free (Treasury) interest rate + risk premium.
• B)Risk free ( Treasury) interest rate - risk premium
• C)Risk free (Treasury) interest rate.
• D)None of these.

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Definitions:

Assumes Risk

The act of knowingly exposing oneself to danger or harm, often in contexts where one voluntarily takes on a risk that is inherent to an activity.

Risk-Contemplated

A term related to considering or evaluating potential risks in decision-making or planning.

Comparative Negligence

A theory in tort law under which the liability for injuries resulting from negligent acts is shared by all parties who were negligent (including the injured party) on the basis of each person’s proportionate negligence.

Alleging Negligence

The act of accusing someone of failing to take proper care in doing something, leading to damage or injury.