Holding All Other Variables Constant, Which of the Following Will

question 47

Multiple Choice

Holding all other variables constant, which of the following will DECREASE the risk of a bond to the investor?

• A)Increase in restrictive covenants
• B)Change in bond rating from B to BBB
• C)Secured with specific assets of the firm
• D)Both a & c
• E)All of the above

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Definitions:

Increasing-Cost Industry

An industry in which production costs rise as firms enter the market, often leading to higher prices for consumers.

Positive Profits

Financial gains achieved when the total revenues exceed the total costs of a business.

Long-Run

In economics, the Long-Run is a period during which all input factors of production and costs are variable, allowing for the adjustment of all possible variables.

Short-Run Profits

Profits earned by a firm in a period where at least one factor of production is fixed.