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 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.
2.
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.
3.
Low bond liquidity can lead to lower transaction costs.
Choose wisely. There is only one correct answer.
False. Low bond liquidity leads to higher trading costs.
4.
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.
5.
When inflation is high, bond prices _______.
Choose wisely. There is only one correct answer.
Decrease. When inflation goes up, bond prices decrease to be more attractive to buyers.