- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 5. Fixed-Income Markets for Government Issuers
- Subject 1. Sovereign Bonds
CFA Practice Question
Which statement(s) is (are) true?
I. High-yield companies may borrow money in the high-yield commercial paper market, although their borrowing cost will be much higher than investment-grade companies.
II. Sovereign defaults never happen.
Correct Answer: Both are false.
I. There is no high-yield commercial paper market.
II. A sovereign default is the failure or refusal of the government of a sovereign state to pay back its debt in full.
User Contributed Comments 4
| User | Comment |
|---|---|
| praj24 | Greece!!!! |
| sriera | and every country in south america or africa! |
| Vlz2103 | all countries. eventually... |
| thevinu | I knew both are false but where tf is the 3rd option? |