Question

Just the answer please

13. Bonds with relatively low risk of default are called securities and have a rating of Baa (or BBB) and above; bonds with ratings below Baa (or BBB) have a higher default risk and are called A) investment grade; lower grade B) investment grade; junk bonds C) high quality; lower grade D) high quality; junk bonds 14. Junk bonds, bonds with a low bond rating, are also known as A) high-yield bonds. B) investment grade bonds. C) high quality bonds. D) zero-coupon bonds. 15. Risk premiums on corporate bonds tend to during business cycle expansions and during recessions, everything else held constant. A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease 16. During a "flight to quality" A) the spread between Baa bonds and Treasury bonds is not affected. B) the spread between Baa bonds and Treasury bonds decreases. C) the spread between Baa bonds and Treasury bonds increases. D) the change in the spread between Treasury bonds and Baa bonds cannot be predicted.

Answer 1

13. Investment grade bonds and junk bonds.

So, the correct option is option B

14.High yield bonds. Junk bonds are also called the high yield bonds.

So, the correct option is option A.

15. Decrease and increase

So, the correct option is C.

16. the correct option is option C. During a flight to quality, investors tend to shift their money to safer instruments as a result, the spread between the treasuries and Baa bonds increases.