A) High yield bonds (also known as junk bonds) pay higher coupon rates than investment-grade bonds. B) High yield bonds have a higher probability of default compared to investment-grade bonds. C) While some institutional investors may avoid high yield bonds due to their risk profile, many invest in them as a way to seek higher returns.

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High Yield Bonds

Question 352

Multiple Choice

High yield bonds:

A) Pay lower coupon rate than investment-grade bonds
B) Have a lower probability of default than junk bonds
C) Are avoided by institutional investors
D) None of these

Correct Answer: