(I) The risk premium widens as the default risk on corporate bonds increases
(II) The risk premium widens as corporate bonds become less liquid.
A) (I) is true, (II) false.
B) (I) is false, (II) true.
C) Both are true.
D) Both are false.
C
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The basis for measuring the cost of capital derived from bonds and preferred stock, respectively, is the
a. pre-tax rate of interest for bonds and stated annual dividend rate less the expected earnings per share for preferred stock. b. pre-tax rate of interest for bonds and stated annual dividend rate for preferred stock. c. after-tax rate of interest for bonds and stated annual dividend rate less the expected earnings per share for preferred stock. d. after-tax rate of interest for bonds and stated annual dividend rate for preferred stock.
Which of the following is NOT a systematic risk?
A) the risk that oil prices rise, increasing production costs B) the risk that the economy slows, reducing demand for your firm's products C) the risk that your new product will not receive regulatory approval D) the risk that the Federal Reserve raises interest rates
Franchisees may be obligated to contribute a percentage of sales to parent corporations
Indicate whether the statement is true or false.
Abdul is a Muslim, and he is allowed to take a few extra breaks each day to perform his prayers. Jake, his co-worker, is annoyed that Abdul gets "special treatment," which he thinks is unfair. Jake is exhibiting _____
a. nationality syndrome c. ethnocentrism b. culture orientation d. ethnorelativism