The Spread Between the Interest Rates on Bonds with Default

question 115

Multiple Choice

The spread between the interest rates on bonds with default risk and default-free bonds is called the

• A)risk premium.
• B)junk margin.
• C)bond margin.
• D)default premium.

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Definitions:

Central Intelligence Agency

A U.S. federal agency responsible for collecting, analyzing, and disseminating foreign intelligence to assist national security.

Intelligence Agency

A government body responsible for the collection, analysis, and exploitation of information and intelligence to support national security and foreign policy objectives.

National Security State

A concept referring to a government or nation that prioritizes its perceived security needs, often leading to significant military and surveillance capabilities.

Military-Industrial Complex

Refers to the close relationship between a country's armed forces, its government, and industries producing military materials, potentially influencing policy and spending.