The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2

-Which of the following names is given to the corporate bonds that carry the maximum risk?

Question

The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2
 
-Which of the following names is given to the corporate bonds that carry the maximum risk?

Quizplus · Accepted Answer

The corporate bonds that carry the maximum risk are called junk bonds. Junk bonds are high-risk, high-yield bonds issued by companies with a low credit rating. They are typically used to finance mergers and acquisitions or other corporate restructuring. Due to their high risk, junk bonds offer a higher yield than investment-grade bonds, making them attractive to some investors but also increasing the chance of default.

The Figure Given Below Shows the Demand [D and D']