Which of the following statements are correct in respect to high-yield bonds?
I. They are junk bonds with highly unpredictable rates of return.
II. The issuing corporation usually has an excessive amount of debt.
III. They possess a high level of default and market risk.
IV. They are often subordinated debentures.
A) I, II and III only
B) II, III and IV only
C) I and III only
D) I, II, III and IV

Question

Quizplus · Accepted Answer

High-yield bonds, also known as junk bonds, are characterized by their high default risk and market risk (I and III). Issuing corporations often have excessive debt (II), and these bonds are frequently subordinated debentures (IV).

Which of the Following Statements Are Correct in Respect to High-Yield