Which of the Following Statements Concerning Junk Bonds Is Most

question 65

Multiple Choice

Which of the following statements concerning junk bonds is most correct?

• A) A rational investor will always prefer a AAA-rated bond to a junk bond.
• B) Junk bonds have higher interest rates than AAA-rated bonds because of the higher risk.
• C) Junk bonds may also be called low-yielding securities.
• D) Junk bonds are priced higher than AAA-rated bonds because junk bonds are more risky.

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Definitions:

Trade Surplus

A scenario in which the value of goods a nation sells to other countries is greater than what it purchases from them, leading to a favorable trade balance.

World Trade Organization

An international organization that regulates and facilitates international trade between nations.

U.S. Goods

Products and services that are produced within the United States.

Export Subsidy

A government payment to a domestic producer to enable the firm to reduce the price of a good or service to foreign buyers.