Imagine a Scandal That Finds the Officers of Bond Rating

question 110

Multiple Choice

Imagine a scandal that finds the officers of bond rating agencies have been taking bribes to inflate the rating of specific bonds. This should:

• A) Have no impact on the bond market since bond markets are highly efficient
• B) Decrease the demand for all bonds
• C) Increase the demand for U.S. Treasury securities and decrease the demand for corporate bonds
• D) Decrease the risk spread

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Definitions:

Keystone Species

A species whose presence in an ecosystem largely determines the species composition and functioning of that ecosystem.

Poison Arrow Frogs

A group of brightly colored frogs that are known for their powerful toxins, which indigenous people have used on the tips of arrows or darts for hunting.

Fruit-Eating Bats

Bats that primarily consume fruits or nectar from flowers, playing critical roles in ecosystem dynamics such as pollination and seed dispersal.

Ecotone

The transition zone where two communities meet and intergrade.