Learn about Default Risk Read Section 7-8 and focus on Vocabulary in the section and Bond Ratings (7-2B) Consider the differences in Risk between an AAA rated bond and a BBB rated bond. In which bond do you think investors expect higher return for taking risk? Now take a look at the chart in Figure 7.5 Select the answer below that summarizes this figure The yield on AAA bonds is greater than the yield on BBB bonds to reflect the higher risk of AAA bonds, since 2009 both yields have declined While the yield on AAA bonds is less than the yield on BBB bonds to reflect the higher risk of BBB bonds, since 2009 both yields have declined and the difference in the yield between AAA and BBB rated bonds has narrowed over time While the yield on AAA bonds is less than the yield on BBB bonds to reflect the higher risk of BBB bonds, there has been a widening of return between AAA and BBB rated bonds There has been a widening of return between AAA and BBB rated bonds adn both yeilds have increased over time reflecting the higher risk in the economy