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Quiz on Default Risk Quiz

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1. Which of the following can be considered as a direct cause of default risk?

2. Which instrument can help investors mitigate default risk?

3. What role does credit rating play in assessing default risk?

4. What factors can increase the default risk of a company?

5. What does a high Yield Spread indicate about a bond's default risk?

6. What does defaulting on a loan imply for the borrower?

7. What does the Altman Z-Score predict about a company's default risk?

8. Who bears the loss when a loan is defaulted?

9. Which of the following organizations specializes in assessing the default risk of debt securities?

10. What impact does higher default risk have on a company’s cost of debt?