Which of the Following Statements Is CORRECT

question 72

Multiple Choice

Which of the following statements is CORRECT?

• A) Subordinated debt has less default risk than senior debt.
• B) Convertible bonds have lower coupon rates than non-convertible bonds of similar default risk because they offer the possibility of capital gains.
• C) Junk bonds typically provide a lower yield to maturity than investment-grade bonds.
• D) A debenture is a secured bond that is backed by some or all of the firm's fixed assets.
• E) Junior debt is debt that has been more recently issued, and in bankruptcy it is paid off after senior debt because the senior debt was issued first.

---

Definitions:

Economic Growth

An increase in the production and consumption of goods and services, reflecting an improvement in a country's economy over time, typically measured by GDP.

Tariff Rates

The taxes imposed by a government on imported or, less commonly, exported goods, often used to protect domestic industries or to generate revenue.

Import Quotas

Limits imposed by a government on the quantity or value of certain goods that can be imported into a country during a specific time.

U.S. Exports

Goods or services produced in the United States and sold to other countries, contributing to the country's economy and trade balance.