Rank the Following Bonds in Order from Lowest Credit Risk

question 18

Multiple Choice

Rank the following bonds in order from lowest credit risk to highest risk all with the same time to maturity, by their yield to maturity: JM Corporate bond with yield of 12.25 percent, IB Corporate bond with yield of 4.49 percent, TC Corporate bond with yield of 8.76 percent, and B&O Corporate bond with a yield of 5.99 percent.

• A) JM bond, TC bond, B&O bond, IB bond
• B) IB bond, B&O bond, TC bond, JM bond
• C) TC bond, B&O bond, IB bond, JM bond
• D) JM bond, IB bond, B&O bond, TC bond

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Definitions:

Boxplot

A graphical representation of data points that displays the distribution's quartiles, median, and potential outliers.

Five-Number Summary

A concise statistical summary comprising the minimum, first quartile, median, third quartile, and maximum of a data set.

Stem-and-Leaf Plot

A graphical representation of a data set where each data value is split into a "stem" and a "leaf", allowing for easy visualization of data distribution.

Histogram

A graphical representation of the distribution of numerical data, often used to depict the frequency of data points in successive intervals.