Help
Course Catalog > Bonds > 200
Bonds 201: Junk Bonds

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
The debt-to-equity ratio measures a company's debt compared to its _______.
Choose wisely. There is only one correct answer.
Stock value. The debt-to-equity ratio is the ratio between a company's debt and its stock value.
2.
The maturity date is the date when a bond is purchased.
Choose wisely. There is only one correct answer.
False. The maturity date is the date the bond must be paid.
3.
Interest rates tend to be less important than company earnings to the price of a junk bond.
Choose wisely. There is only one correct answer.
True. Junk bond prices tend to be more affected by company revenues than interest rates.
4.
The process of investing in many different types of bonds is called diversification.
Choose wisely. There is only one correct answer.
True. Diversification involves choosing securities that involve a wide variety of different aspects, such as risk levels and types of issuers.
5.
The chance a company or government will not pay back a bond is called ______.
Choose wisely. There is only one correct answer.
Default risk. Default is the inability to make payments to debtholders.