Which of the Following Statements About Junk Bonds Is FALSE

question 21

Multiple Choice

Which of the following statements about junk bonds is FALSE?

• A) Given the likelihood of default, it is never profitable to purchase junk bonds.
• B) They pay higher interest rates than investment grade bonds due to higher perceived risk.
• C) Prior to the 1970s, corporations were unable to issue junk bonds.
• D) In October 2016, the average yield on junk bonds was more than twice the average yield on investment grade bonds.

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