If the average risk premium of corporate bonds increases,
A)the average price of corporate bonds will also increase.
B)it's a indicator of a possible upcoming recession.
C)interest rates on those bonds decrease.
D)the risk premium on treasury bonds will also increase.

Question

Quizplus · Accepted Answer

An increase in the average risk premium of corporate bonds often indicates that investors are demanding higher returns for taking on additional risk, which can be a sign of growing concerns about the economy or specific sectors, potentially signaling a looming recession.

If the Average Risk Premium of Corporate Bonds Increases