A company that continues to have strong profit performance during an economic downturn when many other companies are suffering losses or failing should:
A) See an increase in the yield of their bonds and the price of the bond increases
B) See their bond rating maintained or actually increase
C) See the demand for their bonds decrease and their yields decrease
D) See the demand and price for their bonds decrease

Question

Quizplus · Accepted Answer

A company that continues to have strong profit performance during an economic downturn is seen as a stable and reliable investment, and therefore, its bond rating would likely be maintained or even increase. This means that investors will have more confidence in the company's ability to repay its debt, leading to a lower risk premium and potentially lower yields for the company's bonds.

A Company That Continues to Have Strong Profit Performance During