Which of the Following Statements Is Most Correct

question 103

Multiple Choice

Which of the following statements is most correct?

• A)More firms fail or suffer financial distress during periods of economic expansion than during periods of economic recession.Thus, investors tend to require higher premiums to compensate for default risk when the economy is in a recession or is expected to enter one.
• B)More firms fail or suffer financial distress during periods of recession than during periods of economic expansion.Thus, investors tend to require lower premiums to compensate for default risk when the economy is in a recession or is expected to enter one.
• C)Fewer firms fail or suffer financial distress during periods of recession than during periods of economic expansion.Thus, investors tend to require higher premiums to compensate for default risk when the economy is in a recession or is expected to enter one.
• D)Fewer firms fail or suffer financial distress during periods of recession than during periods of economic expansion.Thus, investors tend to require lower premiums to compensate for default risk when the economy is in a recession or is expected to enter one.
• E)none of the above

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Definitions:

Duress

A situation where a person performs an act as a result of violence, threat, or other pressures against them.

Undue Influence

Unfair manipulation or coercion exerted by one party over another, typically in a way that compromises the victim's free will in decision-making or agreement.

Duress

A situation where an individual is forced to act against their will or make a decision under threat of harm or undue pressure.

Undue Influence

An unlawful practice where an individual takes advantage of their position of power over another person to influence their decisions.