libbeyward614 libbeyward614

04-11-2020
Business

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The risk that a bond will not be repaid by the issuing corporation or government agency

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sarasuarez sarasuarez

05-11-2020

Answer: Default Risk

Explanation: The issuer cannot repay face (par) value

• Coupon rate (interest) based on likelihood of default

◦ Higher rate =higher risk ◦ Lower rate=lower risk

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