So-Called Fallen Angels Differ from Junk Bonds in That

question 116

Multiple Choice

So-called fallen angels differ from junk bonds in that

• A) junk bonds refer to newly issued bonds with low credit ratings, whereas fallen angels refer to previously issued bonds which have had their credit ratings fall below Baa.
• B) junk bonds refer to previously issued bonds which have had their credit ratings fall below Baa, whereas fallen angels refer to newly issued bonds with low credit ratings.
• C) junk bonds have ratings below Baa, whereas fallen angels have ratings below C.
• D) fallen angels have ratings below Baa, whereas junk bonds have ratings below C.

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Definitions:

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for slight differentiation and some price control.

Elasticity

A measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determinants.

Signaling Theory

A concept that suggests that individuals send signals about their qualities or intentions through their actions or investments, which others then interpret to make decisions.

Brand Names

The distinctive titles given to products or services by companies to identify and differentiate them from competitors' offerings.