The bonds of Amazon have received a rating of "B" by Moody's. The "B" rating indicates
A) the bonds are insured.
B) the bonds are junk bonds.
C) the bonds are referred to as "high-yield" bonds.
D) the bonds are insured or junk bonds.
E) the bonds are "high-yield" or junk bonds.

Question

Quizplus · Accepted Answer

The "B" rating by Moody's typically indicates that the bonds are considered to be speculative or non-investment grade, which are often referred to as "junk bonds." These bonds carry a higher risk of default but may offer higher yields to compensate for the increased risk, hence they are also known as "high-yield" bonds.

The Bonds of Amazon Have Received a Rating of "B