Which of the following bonds (of equal maturity)would have the largest risk premium?
A)U)S. government bonds
B)German government bonds
C)the bonds of a financially stable corporation, like IBM
D)Bondsbrated Aaa by Moody's
E) junk bonds

Question

Quizplus · Accepted Answer

Junk bonds have the highest risk premium as they are issued by companies with a higher likelihood of default and have lower credit ratings. All the other options have lower risk premiums as they are associated with lower default risk.

Which of the Following Bonds (Of Equal Maturity)would Have the Largest