Which of the following statements about junk (high-risk) bonds is true?
A) They never outperform treasury bonds since they're too risky.
B) The price of junk bonds increase as their perceived risk increases.
C) They tend to perform best during recessions.
D) One can profit by owning them if market perceptions of their risk decline.
D
You might also like to view...
Suppose that a person in the United States earns $5,000 and faces an income tax rate of 25 percent. If that person saves $2,000 and invests it at 12 percent then he or she will pay
A) less in taxes because of the saving. B) tax only on the income spent. C) more in taxes than if there had been no saving. D) tax only on the amount saved.
An decrease in the price of oil on the world market would cause aggregate output to
a. rise and the aggregate demand to rise. b. rise and the aggregate demand to rise. c. rise and the aggregate supply to rise. d. fall and the aggregate supply to fall.