Bonds with Relatively High Risk of Default Are Called

question 82

Multiple Choice

Bonds with relatively high risk of default are called

• A)Brady bonds.
• B)junk bonds.
• C)zero coupon bonds.
• D)investment grade bonds.

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Definitions:

Tax-Exempt

A status of financial or material exemption from the requirement to pay taxes granted by government authorities.

Present Value

The now-value of a later financial sum or succession of monetary flows, using a determined rate of return as the basis for calculation.

Interest Rate

This is the percentage of a sum of money charged for its use.

Equilibrium Interest Rate

The equilibrium interest rate is the interest rate at which the supply of loanable funds equals the demand, reflecting a balance in the financial market.