Question
What will happen to the default risk premium during periods of economic uncertainty?
Multiple choice question.
It may either increase or decrease.
It will decrease.
It will increase.
It will not be affected by the economy.
Multiple choice question.
It may either increase or decrease.
It will decrease.
It will increase.
It will not be affected by the economy.
Answers
GPT-4o mini
The correct answer is:
**It will increase.**
During periods of economic uncertainty, investors typically demand a higher default risk premium as compensation for the increased risk of default on investments.
**It will increase.**
During periods of economic uncertainty, investors typically demand a higher default risk premium as compensation for the increased risk of default on investments.