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    Exam 5: How Do Risk and Term Structure Affect Interest Rates?
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    (I)The Risk Premium Widens as the Default Risk on Corporate
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(I)The Risk Premium Widens as the Default Risk on Corporate

Question 92

Question 92

Multiple Choice

(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.

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