Busıness Fınance I Deneme Sınavı Sorusu #851221

The difference between the promised yield on the corporate bond and the yield on government bond with the same coupon rate and maturity is called __________________.


Price change

Default premium

Market value

Stock valuation

Book value


Yanıt Açıklaması:

The higher the default risk, the higher is the yield on the bonds. The difference between the promised yield on the corporate bond and the yield on government bond with the same coupon rate and maturity is called default premium. The higher the probability of being defaulted, the higher default premium will be.

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