The Higher the Default Risk on a Bond,the Higher the Interest

question 230

True/False

The higher the default risk on a bond,the higher the interest rate will be.

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Definitions:

Unaccepted Draft

A written order to pay a certain amount that has not been accepted or honored by the party it is drawn upon.

Transfer Warranty

Guarantees made by the seller regarding the ownership and quality of property being sold, assuring it is free of claims or liens.

Consideration

Something of value exchanged between parties in a contract, which can include money, services, or goods, making the contract legally binding.

Indorsement

A signature or stamp placed on a negotiable instrument (such as a check) that indicates the future control or ownership of the instrument.