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A premium which reflects possibility of issuer who does not pay...

This question belongs to Commerce Financial Management
Financial Management
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A premium which reflects possibility of issuer who does not pay principal amount of bonds is called

Answer & Solution
Correct Answer: Option C
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.
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