As the Liquidity of Corporate Bonds Decrease,the Risk Premium Required

question 46

True/False

As the liquidity of corporate bonds decrease,the risk premium required on those bonds decrease as well.

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Definitions:

Complex Adaptive Systems

Systems that are made up of multiple, interrelated components which adapt and evolve in response to changes in the environment.

Contingency Approach

A management theory that suggests the most appropriate form of decision making is contingent upon the internal and external situation.

Situational View

An approach that suggests the effectiveness of management techniques depends on the specific circumstances or situation at hand.

Closed-System Thinking

An approach that views organizations as systems that are relatively independent of environmental influences, focusing instead on internal dynamics and efficiency.