"Junk bond" is a term used to describe a bond that _____.
A) is in default
B) is rated Ba or lower by Moody's
C) is currently paying interest
D) has been downgraded by Moody's

Question

Quizplus · Accepted Answer

A junk bond is a bond that is rated Ba or lower by Moody's. This means that the bond has a high risk of default, and is therefore considered a speculative investment. The term "junk" reflects the low credit quality of these bonds.

"Junk Bond" Is a Term Used to Describe a Bond