A Possible Reason for the High Systematic Risk of the Debt

question 1

Multiple Choice

A possible reason for the high systematic risk of the debt service ratio (DSR) in LDCs and EMs is

• A)the tendency of world commodity prices to reflect non-similar economic conditions.
• B)the sensitivity of this ratio to rising nominal and real interest rates in the developed, or lending, countries.
• C)the tendency of prices and world demands for commodities to reflect simultaneously economic conditions.
• D)the discretionary nature of money supply growth for LDC governments.
• E)different demands for imports, and wide differences in the scale of vital imports across LDCs.

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Definitions:

Interest Charges

The cost incurred by borrowing money, expressed as a percentage of the total amount borrowed, paid to the lender as compensation.

Accounting Issues

Accounting Issues encompass any uncertainties, complexities, or challenges that arise in the practice of accounting, including interpretation of standards, error correction, and ethical considerations.

Accounts Receivable

Funds that customers owe to a business for products or services that have been provided but not yet compensated for.

Other Receivable

Accounts receivable that do not fit standard trade transactions, sometimes including loans to employees or advances to suppliers.