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:

Employee's Supervisor

The person in charge of overseeing and guiding the performance and duties of employees within an organization.

Mental Imagery

Mental imagery involves the representation and simulation of sensory experiences in the mind, without external input, often used for creativity, problem-solving, or rehearsal.

Potential Obstacles

Foreseeable challenges or barriers that may impede progress or success.

Mental Imagery

The ability of individuals to simulate or recreate visual perceptions and experiences in their minds without the input of external stimuli.