In a Severe Recession, the Major Source of Risk Faced

question 2

Multiple Choice

In a severe recession, the major source of risk faced by investors who purchase corporate bonds is

• A)purchasing power risk.
• B)interest rate risk.
• C)liquidity risk.
• D)default risk.

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Definitions:

Bloodshed

The act of killing or wounding people, usually in a violent conflict or battle.

Centralized Authority

A system of governance where power and decision-making responsibilities are concentrated in a central body or a few bodies.

Soviet

A governing council in the former Soviet Union, or a local workers' council in Russia pre- and post-Revolution.

Council

A body of elected or appointed members convened to deliberate and make decisions on administrative or legislative issues.