The junk bonds which are rated lower than triple B are also classified as _________?
Correct answer: A. high yield bonds
- A. high yield bonds
- B. low yield bonds
- C. zero floating bonds
- D. high floating rate bonds
Explanation
Junk bonds are below investment grade, commonly rated below BBB or Baa, and are therefore called high-yield bonds because investors demand greater returns for their higher default risk. "Low yield" would contradict this risk-return relationship.
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