"Junk bond" is a term used to describe a bond that
A)is in default
B)is rated Ba or lower
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 credit rating agencies such as Moody's or Standard & Poor's. These bonds are considered to have a high risk of default and are often issued by companies with poor credit histories. The fact that the bond is currently paying interest or has been downgraded by Moody's does not necessarily make it a junk bond.

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