A Key Difference Between Sovereign Default and Corporate Bonds Is

question 69

Multiple Choice

A key difference between sovereign default and corporate bonds is:

• A)unlike a corporation,a country facing difficulty meeting its financial obligations is can not default.
• B)unlike corporate debt,sovereign debt prices are not inverse to yields.
• C)unlike a corporation,any country can turn to the EMU to pay off its debts.
• D)unlike a corporation,a country facing difficulty meeting its financial obligations typically has the option to print more currency.

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Definitions:

Contract Manufacturing

The hiring of a foreign company to produce a specified volume of the initiating company’s product to specification; the final product carries the domestic firm’s name.

Licensing

Licensing is the process whereby a company allows another entity to use its intellectual property, brand, or product for a specified period in exchange for fees or royalties.