What is the relationship between a corporate bond rating and a risk premium? There is no relationship
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Question:
What is the relationship between a corporate bond rating and a risk premium?
There is no relationship between corporate bond rating and risk premium. | ||
The relationship is discrete binary: an investment-grade bond rating is associated with a higher risk premium, a junk-grade bond rating is associated with a lower risk premium. | ||
The relationship is inverse: a higher corporate bond rating is associated with a lower risk premium. | ||
The relationship is linear: a higher corporate bond rating is associated with a higher risk premium. | ||
The relationship is quadratic: a higher corporate bond rating is associated with a much higher risk premium. |
Related Book For
College Accounting Chapters 1-30
ISBN: 978-0077862398
14th edition
Authors: John Price, M. David Haddock, Michael Farina
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