Which of the Following Statements Is FALSE

question 115

Multiple Choice

Which of the following statements is FALSE?

• A)Investors pay less for bonds with credit risk than they would for an otherwise identical default-free bond.
• B)The yield to maturity of a defaultable bond is equal to the expected return of investing in the bond.
• C)The risk of default,which is known as the credit risk of the bond,means that the bond's cash flows are not known with certainty.
• D)For corporate bonds,the issuer may default-that is,it might not pay back the full amount promised in the bond certificate.

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Definitions:

Spontaneous Recovery

The return of a previously eliminated conditioned response following a period of no exposure.

Delayed Reinforcers

Rewards or consequences that are not immediately given after the desired behavior, but after a time delay, which can still effectively modify behavior.

Classical Conditioning

The instruction process by which two stimuli, when paired together repeatedly, cause a reaction that was once only induced by the second stimulus to be triggered by the first stimulus alone.

Primary Reinforcers

Fundamental stimuli that satisfy basic biological needs, such as food, water, and air, and do not require learning to be effective.