Which bond is most likely to default?
A) a junk bond
B) a municipal bond
C) a provincial government bond
D) a bond issued by the Canadian Housing Trust

Question

Quizplus · Accepted Answer

Junk bonds are bonds that have a high risk of default and are considered speculative investments. Municipal and provincial government bonds are considered safer investments since they are backed by a government entity. The Canadian Housing Trust is a federal agency that issues bonds to finance mortgages, making it a relatively low-risk investment. Therefore, a junk bond is most likely to default out of the given choices.

Which Bond Is Most Likely to Default