Short Answer
Figure 1.2
Using the figure above, identify the labeled part.
-Label X: ______________________________
Definitions:
Unsecured
Pertaining to loans or debts that are not backed by collateral, making them riskier for lenders.
Debenture
A type of debt instrument that is not secured by physical assets or collateral but is based on the issuer's creditworthiness and reputation.
Risk Premium
The additional return over the risk-free rate that an investment is expected to yield, compensating investors for taking on higher risk.
Default Risk
The risk of loss arising from a debtor failing to make required payments on their debt obligation.
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