If the Probability of a Bond Default Increases Because Corporations

question 108

Multiple Choice

If the probability of a bond default increases because corporations begin to suffer large losses,then the default risk on corporate bonds will ________ and the expected return on these bonds will ________,everything else held constant.

• A)decrease;increase
• B)decrease;decrease
• C)increase;increase
• D)increase;decrease

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Definitions:

Sleep Deprivation

A condition resulting from insufficient sleep, which can impair cognitive function, mood, and physical health.

General Adaptation Syndrome

A three-stage model that describes the physiological changes the body goes through under stress: alarm, resistance, and exhaustion.

NK Cells

Natural Killer (NK) cells are a type of white blood cell that plays a crucial role in the body's immune response by targeting and destroying cancerous or infected cells.

Prolonged Stress

Extended exposure to stressful situations or stimuli, potentially leading to adverse health effects.