Recent studies cited in the textbook suggest that the default rate on junk bonds has averaged just over 15 percent of the greater of par or market value of those bonds.

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Recent studies have shown that the default rate on junk bonds, while higher than investment-grade bonds, does not typically average as high as 15 percent. The actual average default rate varies but is generally lower, often cited in the range of 2% to 10% depending on the economic cycle and specific time period analyzed.

Recent Studies Cited in the Textbook Suggest That the Default