A Bond with Default Risk Will Always Have a ________

question 50

Multiple Choice

A bond with default risk will always have a ________ risk premium and an increase in its default risk will ________ the risk premium.

• A)positive;raise
• B)positive;lower
• C)negative;raise
• D)negative;lower

Calculate firm's average total cost (ATC) from provided information.

Differentiate between short run and long run decisions in firm operations.

Understand and differentiate between economic profits and accounting profits.

Calculate economic and accounting profits given business operational data.

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Definitions:

Hourly Wages

The rate an employee is paid for each hour worked, often regulated by labor laws.

Guaranteed Contracts

Agreements that assure certainbenefits or compensations, often seen in professional sports and executive employment contracts, regardless of performance or circumstances.

Average Fixed Cost

The fixed expenses of a firm (costs that do not change with output level) divided by the quantity of output produced.

Shutdown Decision

A short-run economic decision made by firms about whether to continue operations or shut down temporarily based on costs and revenue.