Junk bonds:

Junk bonds:

• A. have long maturities.
• B. have short maturities.
• C. sell at a discount.
• D. have varying maturities.

Answer: (D)

Junk bonds, which are also known as high-yield bonds, are issued by companies that have a lower credit rating, typically below investment grade. This means that these bonds carry a higher risk of default compared to higher-rated bonds. As a result, they offer higher yields to attract investors. The characteristic of having varying maturities is significant because junk bonds can be issued with a wide range of maturities, just like other types of bonds. They can have short maturities, long maturities, or anything in between, depending on the issuer's needs and the terms set during the issuance. This diversity in maturities allows investors to choose bonds that align with their investment strategy and risk tolerance. Recognizing this characteristic of junk bonds is crucial for understanding their place in the broader bond market and how they can be utilized in investment portfolios. The variability in maturities gives investors options to select bonds that match their specific investment horizons.

Junk bonds, which are also known as high-yield bonds, are issued by companies that have a lower credit rating, typically below investment grade. This means that these bonds carry a higher risk of default compared to higher-rated bonds. As a result, they offer higher yields to attract investors.

The characteristic of having varying maturities is significant because junk bonds can be issued with a wide range of maturities, just like other types of bonds. They can have short maturities, long maturities, or anything in between, depending on the issuer's needs and the terms set during the issuance. This diversity in maturities allows investors to choose bonds that align with their investment strategy and risk tolerance.

Recognizing this characteristic of junk bonds is crucial for understanding their place in the broader bond market and how they can be utilized in investment portfolios. The variability in maturities gives investors options to select bonds that match their specific investment horizons.