Which of the following is a bond rating category?

The selection of non-investment grade as the correct answer reflects the classification of bonds according to their credit risk. Bonds that are labeled as non-investment grade typically involve higher risk. This designation is used to indicate that these bonds are rated below a certain threshold by credit rating agencies (like Moody's, S&P, or Fitch) and are often referred to as "high-yield" bonds. Investors in non-investment grade bonds expect to receive a higher yield to compensate for the increased risk of default.

Bonds can be rated as investment grade, which signifies lower risk and a higher likelihood of timely payment of interest and principal. In contrast, non-investment grade bonds have lower credit ratings and may not guarantee the same level of safety. This distinction between investment and non-investment grade is crucial for investors seeking to manage their risk exposure in bond markets.

The other categories presented—low risk grade, high risk grade, and junk grade—are either not standard terminology used by rating agencies or are not as accurately descriptive as non-investment grade. Junk grade, for instance, is often used informally to describe non-investment grade bonds, but it lacks the formal recognition of the term non-investment grade which encompasses a broader range of ratings.