The Default-Risk Premium

question 93

Multiple Choice

The default-risk premium:

• A) is negative for a U.S. Treasury bond.
• B) is also known as the risk spread.
• C) must always be greater than 0 (zero).
• D) is assigned by a bond-rating agency.

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Definitions:

Clayton Act

U.S. antitrust law aimed at increasing competition and preventing monopolies by prohibiting certain actions that lead to anti-competitiveness.

Price Discrimination

The practice of selling the same product or service at different prices to different customers, not due to differences in cost.

Competitors

Entities or individuals engaged in a commercial contest or rivalry, vying for the same market share or customer base.

Market Share

The percentage of an industry's sales that a particular company controls.