Asked by Ashton McGinn on Apr 25, 2024
Provide an appropriate definition of default risk premium.
Default Risk Premium
The additional amount a borrower must pay to compensate the lender for assuming the risk that the borrower may default on the loan.
- Comprehend the principles of bond risk encompassing interest rate risk, default risk, and inflation risk.
Learning Objectives
- Comprehend the principles of bond risk encompassing interest rate risk, default risk, and inflation risk.