The bonds that are considered as junk bonds and termed as higher yield are classified as ________?
Correct answer: C. subordinated debentures
- A. expansion debentures
- B. premium debentures
- C. subordinated debentures
- D. ordinate debentures
Explanation
Subordinated debentures rank below senior debt for repayment and therefore carry greater risk, commonly requiring a higher yield and sometimes being classified as junk bonds. The other listed debenture terms are not standard classifications for high-yield bonds.
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