The Greater a Bond's Default Risk, the Greater The

question 94

Multiple Choice

The greater a bond's default risk, the greater the:

• A)maturity value of the bond.
• B)chance the firm will exercise the call provision on the bond.
• C)interest rate stability of the bond in the long run.
• D)investment in the bond by risk-averse investors.
• E)default risk premium (DRP) associated with the bond.

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Definitions:

Ingestion

The intake of food or other substances into the body through the mouth, the first step in digestion.

Sunburn

Skin damage caused by excessive exposure to ultraviolet rays, leading to redness and pain.

Sunbathing

The act of sitting or lying in the sun for the purpose of getting a tan or for relaxation.

Inhaled Poison

A toxic substance that is breathed into the lungs, potentially causing harm or injury to the body.