Examveda
Examveda

A premium which reflects possibility of issuer who does not pay principal amount of bonds is called

A. seasoned risk premium

B. nominal risk premium

C. default risk premium

D. quoted risk premium

Answer: Option C

Solution(By Examveda Team)

A premium which reflects possibility of issuer who does not pay principal amount of bonds is called default risk premium. A default risk premium is effectively the difference between a debt instrument's interest rate and the risk-free rate.

This Question Belongs to Commerce >> Financial Management

Join The Discussion

Related Questions on Financial Management

Investment is the _______________.

A. net additions made to the nation’s capital stocks

B. person’s commitment to buy a flat or house

C. employment of funds on assets to earn returns

D. employment of funds on goods and services that are used in production process