Junk Bonds Are High Risk, High Yield Debt Instruments

question 70

True/False

Junk bonds are high risk, high yield debt instruments.They are often used to finance leveraged buyouts and mergers, and to provide financing to companies of questionable financial strength.

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Definitions:

Price Discriminate

A sales approach where the same goods or services are sold at varying prices to different buyers, depending on their readiness to spend.

Pure Monopolist

A single seller in a market that has no close substitutes, giving the seller complete control over the price and quantity of goods or services.

Profit-Maximizing

The act of adjusting production levels, prices, or other business operations to achieve the maximum profit.

Local Monopoly

A market structure wherein a single firm dominates the market in a particular geographic area, often due to the absence of viable competitors.