Which of the following bonds would have the highest default risk?
A) Municipal bonds
B) Investment-grade bonds
C) U.S. Treasury bonds
D) Junk bonds

Question

Quizplus · Accepted Answer

Junk bonds are high-risk and high-yield bonds issued by companies that have a lower credit rating. These bonds have the highest default risk of the options listed. Municipal bonds are issued by local governments and are considered safer because they are backed by the government's ability to tax its citizens. Investment-grade bonds have a higher credit rating and are considered safer than junk bonds. U.S. Treasury bonds are backed by the U.S. government and are considered the safest investment option.

Which of the Following Bonds Would Have the Highest Default