If a corporation begins to suffer large losses, then the default risk

If a corporation begins to suffer large losses, then the default risk on the corporate bond will

A) increase and the bond’s return will become more uncertain, meaning the expected return on the corporate bond will fall.
B) increase and the bond’s return will become less uncertain, meaning the expected return on the corporate bond will fall.
C) decrease and the bond’s return will become less uncertain, meaning the expected return on the corporate bond will fall.
D) decrease and the bond’s return will become less uncertain, meaning the expected return on the corporate bond will rise.

ANSWER

A