Question

A speculative-grade bond (junk) which offers a high yield, but high risk provides ______ income, but is ______ risky.

1) low, low
2) high, low
3) low, high
4) high, high

Answer 1

A junk bond offers high income but is highly risky.

Step-by-step explanation:

A speculative-grade bond, also known as a junk bond, offers a high yield (high-interest rate) to compensate for its higher level of risk. This means that junk bonds provide high income but are also highly risky.