Which of the Following Statements Is False

question 38

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) 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.