Event Risk Is the Possibility That a Bond Will Experience

question 3

Multiple Choice

Event risk is the possibility that a bond will experience which one of the following?

• A) sudden increase in market value
• B) unexpected call by the issuer
• C) decrease in conversion value due to a sudden decline in the price of the issuer's stock
• D) decrease in credit quality due to a financial or structural change in the bond issuer
• E) decrease in intrinsic value due to an unexpected increase in market interest rates

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Definitions:

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The 31st President of the United States, serving from 1929 to 1933, best known for his leadership during the early years of the Great Depression.

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