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What Is Meant by the Term 'Junk Bond

Question 18

Multiple Choice

What is meant by the term 'junk bond'?


A) It is a financial instrument with predominantly debt characteristics but offering high rate and high risk, and sometimes offering an equity kicker.
B) It is a financial instrument with predominantly equity characteristics but offering high dividends and high risk, and sometimes offering a linked debt kicker.
C) It is a worthless bond.
D) It is a financial security issued by retail chains selling inexpensive items.

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