Financial Risk Manager Part 1
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A sovereign wealth fund manager is tasked with assessing the risks associated with bonds issued by bodies in emerging and developed economies. The evaluation takes into account the default risk on sovereign bonds and the specific risks inherent in corporate bonds from these countries. Presuming that all other variables remain the same, which of the following statements is the manager most likely to find accurate in forming a conclusion?
A sovereign wealth fund manager is tasked with assessing the risks associated with bonds issued by bodies in emerging and developed economies. The evaluation takes into account the default risk on sovereign bonds and the specific risks inherent in corporate bonds from these countries. Presuming that all other variables remain the same, which of the following statements is the manager most likely to find accurate in forming a conclusion?
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A
A global economic downturn will generally have less impact on developing countries than on developed countries.
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B
Countries that have larger commitments to provide health care and pay pensions to their citizens will have higher default risk than equivalent countries that do not.
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