Q249
Junk bonds which are rated lower than triple B are also classified as
A.
high yield bonds
AnswerB.
low yield bonds
C.
zero floating bonds
D.
high floating rate bonds
Answer: Option A
Solution
Answer: Option A
Solution:
Junk bonds which are rated lower than triple B are also classified as high yield bonds. A high-yield bond is a high paying bond with a lower credit rating than investment-grade corporate bonds, Treasury bonds and municipal bonds. Because of the higher risk of default, these bonds pay a higher yield than investment grade bonds.