SIE practice questioneasyCorporate Bonds
Which of the following is most likely to have the highest yield?
- ATreasury bond
- BInvestment-grade corporate bond
- CHigh-yield corporate bond✓ Correct answer
- DMunicipal bond
Explanation
Why C — High-yield corporate bond
High-yield (junk) bonds offer the highest yields to compensate for their higher default risk. Treasury, investment-grade, and municipal bonds generally offer lower yields.
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