When a Company Whose Ability to Repay Its Obligations in Full

question 95

Multiple Choice

When a company whose ability to repay its obligations in full is uncertain

• A) it will have to issue debt with longer maturities than would a company with a lower probability of default.
• B) its bonds will sell for higher prices than would the bonds of a company with a lower probability of default.
• C) it must offer investors higher yields to compensate them for the risk they take in buying their bonds or making loans.
• D) it must do so through financial markets rather than through financial intermediaries.

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Definitions:

ABAB Design

A type of experimental design consisting of four phases: a baseline phase (A), an intervention phase (B), a return to the baseline phase (A), and a second intervention phase (B), used to assess the effects of an intervention.

Brain Imaging Techniques

Methods used in neuroscience and psychology to visualize the structure or function of the brain, including MRI, CT scans, and PET scans.

Epidemiology

The study of the incidence and prevalence of disorders in a population.

Incidence

The occurrence, rate, or frequency of a disease, crime, or something else undesirable.