Bonds rated as "highly speculative" are:
A) rated so because they guarantee high returns for the buyer.
B) commonly referred to as junk bonds.
C) ranked just above investment grade by Standard & Poor's.
D) rated so because they do not have any default risk.

Question

Quizplus · Accepted Answer

Bonds rated as "highly speculative" are commonly referred to as junk bonds. This is because they have a high default risk and are typically issued by companies with a poor credit rating. These bonds offer higher yields to compensate for the increased risk.

Bonds Rated as "Highly Speculative" Are