Which of the Following Statements About Junk Bonds Is False

question 28

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)A popular measure of junk bond yields reached a record low in 2012.

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Definitions:

Feudalism

A social system in medieval Europe where the nobility held lands from the Crown in exchange for military service, and vassals were in turn tenants of the nobles, while the peasants were obligated to live on their lord's land and give him homage, labor, and a share of the produce.

American Opinion

Refers to the collective attitudes or beliefs held by the American public on various topics and issues.

Poverty

A socio-economic condition characterized by a lack of financial resources and access to basic needs such as food, shelter, and healthcare.

Socioeconomic Status

A combined measure that typically includes a person's income, education level, and occupation to classify their position within society.