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Which one of the following statements concerning bond ratings is correct? Any bond rated below A is considered a junk bond. Junk bonds are also

Which one of the following statements concerning bond ratings is correct?

Any bond rated below A is considered a junk bond.

Junk bonds are also called low-yield bonds.

Bond ratings are based only on the risk of default.

Ratings of bonds are based on both the risk of default and the interest rate risk.

All else equal, a bond rated AA should pay a higher return than a bond rated A.

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