Default Risk Arises from the Fact That

question 6

Multiple Choice

Default risk arises from the fact that

• A) borrowers differ in their ability to repay in full the principal and interest required by a bond agreement.
• B) the bond price drops when interest rates rise.
• C) it is inherently riskier to wait for a capital gain than to receive an immediate interest payment.
• D) interest rates are far more likely to go up than to go down.

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Definitions:

Prayer

A spiritual or religious act of communication with a deity or higher power, often involving praise, thanksgiving, confession, or requests.

Clinical Studies

Research investigations conducted to assess health outcomes of specific interventions or exposures on humans.

Treatment

The application of remedies or therapies to cure disease, relieve symptoms, or improve health in a patient.

Favorably

In a way that shows approval or preference; positively or with good results.