What Is Meant by "Default Risk" in Bonds, and How

question 76

Essay

What is meant by "default risk" in bonds, and how do investors respond to it?

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Definitions:

Local Businesses

Small-scale enterprises that serve the local community, often characterized by their local ownership, operation, and limited geographical market reach.

Flat World

The idea that globalisation has led to a level playing field in terms of commerce, enabling all countries to compete equally.

Thomas Friedman

An American journalist, author, and three-time Pulitzer Prize winner known for his writings on globalization and technology.

Global Integration

The process of designing and implementing strategies to operate seamlessly across national borders, often involving the coordination of production, marketing, and R&D worldwide.