PIK-bonds
A) are relatively safe investments.
B) initially pay interest payments in the form of additional debt.
C) are collateralized by home mortgages.
D) pay monthly interest payments.

Question

Quizplus · Accepted Answer

PIK bonds, or Payment-In-Kind bonds, initially pay interest not in cash but in the form of additional debt, meaning the interest payments increase the principal amount owed rather than being paid out in cash at the time of the interest payment.

PIK-Bonds