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1) Default premiums typically display a ____ pattern (relative to the business cycle). A) procyclical B)...

1) Default premiums typically display a ____ pattern (relative to the business cycle). A) procyclical B) cyclically neutral C) countercyclical D) random

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Answer #1

Defaults premiums typically display a "procyclical" pattern relative to the business cycle.

If the business cycle is going to boom then the default premiums drop and if it is going through recession then it increases.

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