More on types of bonds

You can distinguish the various types of bonds by their terms of contract, pledge of collateral, and so on$.$ Identify the type of bond based on each description given in the table that follows:

Description

Type of Bond

These bonds are backed by real estate holdings and equipment, and if a company goes bankrupt, the collateral can be sold off to compensate for the default. These bonds, more so than other collateralized securities$,$ have prior claims over assets.

These bonds are traded in the bond markets based on investors' belief that the issuer will not default on the repayment. These bonds have no collateral and usually offer higher yields.

These bonds are considered the riskiest of all corporate bonds and thus offer the highest interest rates.

Based on your understanding of bond ratings and bond$-$rating criteria, which of the following statements is true?

US government bonds usually have the lowest yields in the bond markets.

BBB bonds usually have the lowest yields in the bond markets.

In $2008,$ the United States began to witness one of the worst recessions since the $1930$ s$.$ The collapse of the housing bubble in $2006$ led to a massive decline in real estate prices, affecting consumers and institutions, especially banking and financial entities. Severe liquidity shortfalls in the United States as well as other global markets led to a serious credit crisis. During the credit crisis of $2008-2009,$ several banks and other businesses went through a reorganization process or were forced to liquidate. Consider the following example: