Which of the following statements is TRUE（）
A. When a rating agency downgrades a security, the bond’s price usually falls.
B. Technical default usually refers to the issuer’s failure to make interest or principal payments as scheduled in the indenture.
C. Default risk is important because if a bond issuer defaults, the bondholder likely loses his entire investment.
参考答案：A
解析：
The market will likely demand a higher yield from the downgraded bond (the risk premium has increased) and thus the price wilt likely fall. Technical default usually refers to an issuer’s violation of bond covenants, such as debt ratios, rather than the failure to pay interest or principal. In the event of default, the holder (lender) may recover some or all of the investment through legal action or negotiation.