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TiliK225 [7]
3 years ago
9

When the economy starts expanding there is a/an __________ in the term premium and a/an ___________ in the risk premium. Group o

f answer choices increase, increase decrease, decrease increase, decrease decrease, increase
Business
1 answer:
makkiz [27]3 years ago
3 0

Answer:

Increase in premium

Decrease in the risk premium

Explanation:

Premium can be  defined as the rewards earned by investors who has decided to engage in new businesses in a risk free state while risk premium is defined as the excess reward earned above the free risk rate that is expected to earn in the course of investment.In order word , it is a form of compensation for the risk undertaken .

As economy starts expanding , one of the consequences is that the premium will increase while the development reduces related risks and risk premium reduces.

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