All of the Following Are True About the Risk Spread

question 82

Multiple Choice

All of the following are true about the risk spread except:

• A) It should be higher for highly speculative bonds than investment grade bonds
• B) It should have a direct relationship with the bond's yield
• C) It should have an inverse relationship with the bond's price
• D) It should have a direct relationship with the bond's price

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Definitions:

Industry Growth

The rate at which a specific industry expands its capacity, production, or market size over a period.

Buyer Power

The influence and negotiating power that consumers or purchasing agents have over sellers in an economic marketplace.

Decrease Buyer Power

Strategies or market conditions that reduce the negotiation leverage of buyers, enhancing the seller's position.

Command A Higher Price

Being able to sell goods or services at a price above the average due to perceived added value, quality, or brand reputation.