(I) The risk premium widens as the default risk on corporate bonds increases. (II) The risk premium widens as corporate bonds become less liquid.
举一反三
- (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.
- The spread between the interest rates on bonds with default risk and default-free bonds is called the risk premium.
- Bonds with relatively high risk of default are called ________
- An analyst does research about cost of common equity. With respect to calculating the cost of equity using the bond yield plus risk premium approach, which of the following statements about the risk premium is least accurate（） A: The risk premium compensates for the additional risk of equity compared with debt. B: We often estimate the risk premium using historical spreads between bond yields and stock yields. C: In developed country markets, a typical risk premium added is in the range of 2 to 4 percent.
- This kind of additional risk is coverable_________ a premium of 0.2%.