Which of the Following Statements Is FALSE

question 77

Multiple Choice

Which of the following statements is FALSE?

• A)Investors pay less for bonds with credit risk than they would for otherwise identical default-free bonds.
• B)Credit spreads fluctuate as perceptions regarding the probability of default change.
• C)Credit spreads are high for bonds with high ratings.
• D)We refer to the difference between the yields of the corporate bonds and the Treasury yields as the default spread or credit spread.

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Definitions:

Public Sphere

A social space where people gather to openly talk about and pinpoint issues in society, thereby affecting political actions through their discussions.

Representative Government

A system of government where citizens elect representatives to make decisions on their behalf.

Continental Army

The revolutionary war army authorized by the Continental Congress in 1775 and led by General George Washington to fight against British rule in America.

State Militias

Military forces maintained by states within the U.S. for protection and emergency situations, distinct from the federal armed services.