The Average Default Rate in the Economy Is 1

question 21

Multiple Choice

The average default rate in the economy is 1.5% of the face value of outstanding debt defaults per year.How many years will it be on average before half the firms are no longer in existence if no new firms enter the economy?

• A)44 years
• B)45 years
• C)46 years
• D)47 years

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Definitions:

Universality

A principle that a certain idea, condition, or concept applies to everything in a particular category without exception.

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The selfless concern for the well-being of others, often characterized by acts of kindness and generosity without expectation of reciprocation.

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