11-82 Marginal Default Probability Refers to the

question 16

Multiple Choice

11-82 Marginal default probability refers to the

• A)probability that a borrower will default over a specified multiyear period.
• B)marginal increase in the default probability due to a change in credit premium.
• C)historic default rate experience of a bond or loan.
• D)expected maximum change in the loan rate due to a change in the credit premium.
• E)probability that a borrower will default in any given year.

---

Definitions:

Installment Sales Revenue

Revenue recognized from sales that are paid in installments over a period, rather than in a single transaction.

Installment Sales Method

An accounting technique used to recognize revenue from sales made on credit, where income is recognized proportionally as payments are received.

Recognized Gross Profit

Gross profit that has been realized and reported in the financial statements of a company, calculated as sales revenue minus the cost of goods sold.

Periodic Cash Proceeds

Periodic cash proceeds refer to the regular amounts of money received by a business over a specified period, such as from sales or investments.