Because junk bonds carry a much higher risk of default,they also carry an interest rate ________ percent above the AAA grade long-term bonds.

Question

Quizplus · Accepted Answer

Junk bonds, due to their higher risk of default compared to investment-grade bonds, typically offer an interest rate that is 3 to 6 percent higher than AAA-grade long-term bonds to compensate investors for the increased risk.

Because Junk Bonds Carry a Much Higher Risk of Default,they