Question

Which of the following risks is associated with the degree of recovery if default occurs? Group...

Which of the following risks is associated with the degree of recovery if default occurs?

Group of answer choices

a. Liquidity risk.

b. Credit risk.

c. Reinvestment risk.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

✔ Recommended Answer
Answer #1

Answer: Credit risk

Explanation:

Liquidity risk:
Refers to the risk that a firm will not be able to meet its short term financial obligations as they fall due.
Credit risk:
Refers to the risk of default on a debt, this risk comes up when a borrower fails to make the required payments to the lender.
Reinvestment risk:
It refers to a probability that an investor will not be able to reinvest the cash flows (such as coupon payments from bonds) at a rate that is equivalent to the current rate of return of the investment.

1 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Similar Questions
45.which of the following risks is associated with the degree of recovery if default occurs? credit...
45.which of the following risks is associated with the degree of recovery if default occurs? credit risk reinvestment risk liquidity risk 47.in asset-backed securities, if an issue had credit tranching, it means investors can: select senior or subordinated bonds reduce extension risk reduce contraction risk
If you are a retiree, which of the following risks associated with the bonds are you...
If you are a retiree, which of the following risks associated with the bonds are you most concerned about? a. Price Risk b. Interest Rate Risk c. Default Risk d. Reinvestment Risk
If you are a retiree, which of the following risks associated with the bonds are you...
If you are a retiree, which of the following risks associated with the bonds are you most concerned about? a. Price Risk b. Interest Rate Risk c. Default Risk d. Reinvestment Risk
Which of the following risks facing financial institutions is/are the most relevant for a commercial bank?...
Which of the following risks facing financial institutions is/are the most relevant for a commercial bank? I. credit (or default) risk II. foreign exchange risk III. interest rate risk IV. liquidity risk V. sovereign risk a. I only b. I, III, and IV c. I, II, III, and IV d. All of the risks listed are equally important at a commercial bank.
45. Which of the following is not associated with federal government debt? a. Liquidity risk b....
45. Which of the following is not associated with federal government debt? a. Liquidity risk b. Default risk c. Maturity Risk d. Both a & b
Q1 Which of the following is market risk? Choose all that apply. Default risk Foreign exchange...
Q1 Which of the following is market risk? Choose all that apply. Default risk Foreign exchange risk Commodity price risk Q2 __________ is the risk that fluctuations in market prices will reduce the value of a security or portfolio, while ____________ is a risk of loss due to physical catastrophe or any technical or process errors in the firm’s operations. Market risk; credit risk Credit risk; liquidity risk Market risk; operational risk Credit risk; business risk
A Collateralized mortgage obligation (CMO) has: A. no prepayment risk. B. no default risk. C. no...
A Collateralized mortgage obligation (CMO) has: A. no prepayment risk. B. no default risk. C. no default, no prepayment and no interest rate risks. D. no interest rate risk. E. high degree of interest rate risk.
The primary purpose of portfolio diversification is to: Group of answer choices A.increase returns and risks....
The primary purpose of portfolio diversification is to: Group of answer choices A.increase returns and risks. B.eliminate all risks. C.eliminate firm-specific risk. D.eliminate systematic risk. E.lower both returns and risks.
Which of the following is not a legitimate purpose served by the due diligence process? Group...
Which of the following is not a legitimate purpose served by the due diligence process? Group of answer choices a,Discovering the risks associated with the acquiree, such as unrecorded contingent liabilities. b,Providing correct valuation of the acquiree’s assets and liabilities. c,Informing the transaction price to be paid by the acquirer for a business. d, Ensuring the maximum purchase price of the acquiree’s business.
Which of the following statements is true concerning mitosis? Group of answer choices mitosis occurs in...
Which of the following statements is true concerning mitosis? Group of answer choices mitosis occurs in the cell nucleus mitosis is the division of a cell during sexual reproduction mitosis is cell division of an already existing cell all of the above are true
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT