Which of the following is a measure of the credit worthiness of the issuer of a security?
A)the liquidity premium
B)the discount from par
C)the money illusion
D)the credit risk

Question

Quizplus · Accepted Answer

Credit risk refers to the likelihood of the issuer of a security defaulting on their payments, which is a measure of their credit worthiness. The liquidity premium refers to the extra return investors would demand for holding a less liquid security, while the discount from par reflects the market's assessment of the security's current value compared to its face value. The money illusion refers to the tendency for people to focus on nominal rather than real values, which is not directly related to credit worthiness.

Which of the Following Is a Measure of the Credit