If a corporation begins to suffer large losses, then the default risk on the corporate bond will

A) increase and the bond's return will become more uncertain, meaning the expected return on the corporate bond will fall.
B) increase and the bond's return will become less uncertain, meaning the expected return on the corporate bond will fall.
C) decrease and the bond's return will become less uncertain, meaning the expected return on the corporate bond will fall.
D) decrease and the bond's return will become less uncertain, meaning the expected return on the corporate bond will rise.

A

Economics

You might also like to view...

Why does the segmented markets theory suggest think that bonds of different maturities are not perfect substitutes for each other?

What will be an ideal response?

Economics

Keynesian economics focuses on the role of aggregate spending in determining the level of real GDP

a. True b. False Indicate whether the statement is true or false

Economics