Which of the following statements is most correct?
A) Junk bonds typically have a lower yield to maturity relative to investment grade bonds.
B) A debenture is a secured bond which is backed by some or all of the firm's fixed assets.
C) Subordinated debt has less default risk than senior debt.
D) All of the statements above are correct.
E) None of the statements above is correct.

Question

Quizplus · Accepted Answer

Junk bonds have a higher yield to maturity due to higher risk, a debenture is an unsecured bond, and subordinated debt has more default risk than senior debt.

Which of the Following Statements Is Most Correct