Question
Which of the following statements is most CORRECT? a. Junk bonds (high yield) are bonds rated BB and below. b. Zero-coupon bonds are desirable since
Which of the following statements is most CORRECT?
a. | Junk bonds (high yield) are bonds rated BB and below. | |
b. | Zero-coupon bonds are desirable since they face no federal taxes. | |
c. | If you currently own a bond (with 2 years left until maturity) and you think bond interest rates are going to increase this year to more than the coupon rate that exists on this bond, you should sell the bond now to maximize the return you get from owning the bond. | |
d. | Subordinated debentures are bonds that in the event of liquidation are guaranteed to be paid in full. | |
e. | None of these answer options is correct. |
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