An Investor Makes the Following Remark: "I Don't Understand the Junk

question 72

Essay

An investor makes the following remark: "I don't understand the junk bond market. Junk bonds have become more liquid. This should have made them more desirable and increased the demand for them. The increased demand should have driven their yields up, but in fact their yields have gone down. I guess investors just don't value liquidity." Do you agree with the investor's reasoning?

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Definitions:

Soft Palate

Posterior muscular portion of the palate, forming an incomplete septum between the mouth and the oropharynx and between the oropharynx and the nasopharynx.

Peristalsis

Peristalsis is the series of wave-like muscle contractions that move food through the digestive tract from the esophagus to the rectum.

Nasal Cavity

Cavity between the external nares and the pharynx. It is divided into two chambers by the nasal septum and is bounded inferiorly by the hard and soft palates.

Pylorus

The opening from the stomach into the duodenum, regulated by a sphincter that controls the passage of digested food.