Asked by Razmin Ellazar on Apr 29, 2024
Verified
Speculative or junk bonds are bonds with ratings of BB and below.
Junk Bonds
High-risk, high-yield bonds issued by companies with lower credit ratings than investment-grade bonds.
Speculative
Involving financial actions that carry a significant risk of losing all value but also hold the promise of substantial gains.
Ratings
Assessments or evaluations used to rank or score entities based on certain criteria, such as financial strength or quality.
- Understand the classification and risk levels of various bonds and securities.
Verified Answer
ZK
Zybrea KnightMay 03, 2024
Final Answer :
True
Explanation :
Speculative or junk bonds are indeed rated BB or below by rating agencies, indicating a higher risk of default compared to investment-grade bonds.
Learning Objectives
- Understand the classification and risk levels of various bonds and securities.