1) The expected yield on junk bonds is higher than the yield on AAA-rated bonds because of the higher default risk associated with junk bonds.

True or False

2) The portfolio beta is simply the sum of the betas of the individual stocks in the portfolio.

True or False

A type of bond that is considered highly speculative is known as a(n)____

a) convertible bond

b) U.S. Treasury Bond

c) garbage bond

d) junk bond