Question

Pick out the feature which is not true in the case of repudiation of debt.
a. The simplest method of liquidating a debt.
b. It will increase the credibility of the government.

c. Debtors may face loss.

d. It is discriminating​

Answer 1

Answer:

b. It will increase the credibility of the government.

Answer 2

Option c is the correct answer

In the case of repudiation of debt , it'll not increase the credibility of the government.

Repudiation occurs when one party refuses to honor a contract with another party.

• A breach of contract could also be settled in the courts.
• The innocent party during a repudiation situation may cancel the contract or let it stand with the hope of the issue being resolved.
• If you repudiate a contract, it doesn't automatically terminate it.
• With fixed income instruments, it's always possible that the borrower may default, dispute the validity of the contract, or otherwise refuse to pay.
• If the borrower repudiates the contract, the corresponding investors may lose their entire investment unless they will recourse against the borrower.
• Within the case of sovereign debt, however, there's often not any method of recourse against the borrowing nation.

Often the party doing the repudiation cannot perform its obligations outlined within the contract due to financial difficulties.

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