Bonds with relatively low risk of default are called ________ securities and have a rating of Baa (or BBB)and above;bonds with ratings below Baa (or BBB)have a higher default risk and are called ________.
A)investment grade;lower grade
B)investment grade;junk bonds
C)high quality;lower grade
D)high quality;junk bonds

Question

Quizplus · Accepted Answer

Bonds with relatively low risk of default are called investment grade securities and have a rating of Baa (or BBB) and above. Bonds with ratings below Baa (or BBB) have a higher default risk and are referred to as junk bonds.

Bonds with Relatively Low Risk of Default Are Called ________