Junk bonds are bonds that are rated lower than investment-grade bonds, typically below a B rating. Because of the higher risk associated with these bonds, they offer higher interest rates to entice investors to purchase them. Therefore, A) is the correct answer as junk bonds are typically paid with the highest interest rates.

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Junk Bonds ________

Question 44

Multiple Choice

Junk bonds ________.

A) are paid with the highest interest rates
B) are typically rated in the A or B category
C) are relatively safe investments
D) are backed by insurance policies
E) are not attractive to any investors

Correct Answer: