Corporate Bonds That Pay Higher Interest but Also Have a Higher

question 111

Multiple Choice

Corporate bonds that pay higher interest but also have a higher risk of default are called:

• A)convertible bonds.
• B)high-yield bonds.
• C)mortgage bonds.
• D)serial bonds.
• E)callable bonds.

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Definitions:

Bank Charters

Legal documents issued by a governmental or regulatory body granting the right to operate as a bank and outlining the specific conditions under which the bank must operate.

Savers

Individuals or entities that set aside a portion of their disposable income, rather than using it for consumption expenditures.

Borrowers

Individuals or entities that take out loans from financial institutions or individuals, agreeing to repay them over time, typically with interest.

Speculative Motive

The intention to hold cash for the purpose of taking advantage of future changes in the value of assets, securities, or commodities.