Examlex
Which of the following is an example of the second A in the AAA model?
Default Risk
The risk that a borrower fails to make the promised loan or bond repayments to the lender or bondholders.
Maturity Risk
The risk associated with the length of time until the face value of an investment is returned, affecting its susceptibility to interest rate changes.
Long-Term Bond
A bond with a maturity date extending beyond 10 years, offering higher yields to compensate for the increased risk associated with the longer duration.
Equity Investment
An investment in shares of a company, providing ownership interest to the investor.
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