Which of the Following Statements Are Correct in Respect to High-Yield

question 104

Multiple Choice

Which of the following statements are correct in respect to high-yield bonds?
I. They are junk bonds with highly unpredictable rates of return.
II. The issuing corporation usually has an excessive amount of debt.
III. They possess a high level of default and market risk.
IV. They are often subordinated debentures.

• A) I, II and III only
• B) II, III and IV only
• C) I and III only
• D) I, II, III and IV

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Definitions:

Government Regulations

Guidelines and rules established by governmental bodies to control and direct the activities of businesses and individuals within a society.

Price Searcher

a firm that has some control over the price it charges, as it offers a product or service that is differentiated from those of competitors.

Price Taker

An entity in a market that must accept prevailing prices and lacks the power to influence them due to its small market share.

Identical Products

Goods that are exactly the same in every feature and aspect, making them perfectly substitutable for one another.