The Major Factor Resulting in a Decrease in a Bond's

question 10

Multiple Choice

The major factor resulting in a decrease in a bond's rating is

• A) decrease in marketability.
• B) increase in default risk.
• C) the call provision.
• D) an increase in its coupon rate.

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Definitions:

Payment Of Interest

The act of paying interest on borrowed capital, such as loans or bonds, as per the agreed terms and schedule.

Equal Installments

A method of loan repayment where the borrower pays the same amount periodically over the duration of the loan.

Borrowed

Referring to money or items obtained on loan, with the obligation to return or repay according to agreed terms.

Mortgage

A loan used to purchase real estate, where the property itself serves as collateral for the loan.