Fatima recently started her own tutoring firm to offer study help for high school students. To help finance her new business, which has a very limited track record, she issued bonds that offered relatively high rates of interest and had higher inherent risks. Which type of bond is Fatima most likely using in this scenario?

Question

Quizplus · Accepted Answer

In this scenario, Fatima is most likely using junk bonds, which offer relatively high rates of interest because they have higher inherent risks. Historically, junk bonds have been associated with companies in poor financial health and/or startup firms with limited track records.

Fatima Recently Started Her Own Tutoring Firm to Offer Study