The Risk That the Borrower Will Not Pay the Face

question 107

Multiple Choice

The risk that the borrower will not pay the face value of a bond on the maturity date is called the:

• A) default risk.
• B) maturity risk.
• C) timing risk.
• D) full-pay risk.
• E) par value risk.

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Definitions:

Standard Price

A pre-determined cost that is often used in budgeting and financial planning, serving as a benchmark for performance evaluation.

Direct Materials

Materials that become an integral part of a finished product and whose costs can be conveniently traced to it.

Final, Delivered Cost

The comprehensive cost of a good or service including its production, logistics, and any other costs until its delivery to the final consumer.

Standard Labor Rate

The predetermined cost of labor per hour used to estimate the total labor costs of a production process or project.