If we want to get some idea about a(n) ________ over time between two specific assets, we can compare the returns on top-rated corporate bonds and U.S. government bonds.
A) inflation premium
B) default premium
C) maturity premium
D) liquidity premium

Question

Quizplus · Accepted Answer

The default premium is the additional yield that investors require to hold a bond with credit risk compared to a risk-free bond. Comparing returns on top-rated corporate bonds (which have some credit risk) and U.S. government bonds (considered risk-free) helps assess the default premium over time.

If We Want to Get Some Idea About A(n) ________