Which of the Following May Be Said to Create a Debt

question 36

Multiple Choice

Which of the following may be said to create a debt market environment,whereby one company may obtain a comparative interest rate advantage over another company in the fixed interest rate market,compared with the floating interest rate market?

• A) The existence of market segmentation between the fixed and floating rate markets.
• B) Typically, fixed-rate market risk premiums are based on external credit rating agency reports.
• C) Professional institutional lenders, such as banks and merchant banks, apply their own internal credit risk premiums.
• D) All of the given answers.

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Definitions:

Mixed Economy

An economic system combining elements of both capitalism and socialism, with some sectors privately owned and others controlled by the government.

Economy

The system by which goods and services are produced, distributed, and consumed within a particular country or region.

Particular Society

A specific group of people characterized by distinct social institutions, traditions, and cultural practices.

Learned

Pertains to knowledge or skills acquired through study, experience, or teaching.