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SSC Audit Tax Finance P-II QUESTION #6180
Question 1
Which component of the interest rate compensates for the risk that a company might go bankrupt?
  • Maturity Risk Premium (MR)
  • Liquidity Preference (LP)
  • Default Risk Premium (DR)✔️
  • Inflation (g)
Correct Answer Explanation
Lesson 04 defines DR as the premium charged against the risk that a company might collapse or default on payments.