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:

Marginal Cost

The cost added by producing one additional unit of a product, emphasizing the variations in expenses as production scales.

Economically Desirable

Attributes or actions that are beneficial from an economic standpoint, promoting efficiency, growth, or productivity.

Producer Surplus

The difference between the amount producers are willing to supply a good for and the actual amount they receive by selling it.