Junk bonds have all of the following characteristics except:
A) high risk and high promised yield.
B) low bond rating.
C) interest is paid only when the company can afford it.
D) are usually debentures as opposed to being a mortgage bond.

Question

Quizplus · Accepted Answer

Junk bonds are characterized by high risk and high promised yield, low bond ratings, and they are often debentures rather than mortgage bonds. However, the interest on junk bonds is not conditional on the company's ability to afford it; interest payments are obligatory and not discretionary.

Junk Bonds Have All of the Following Characteristics Except