A Junk Bond Is a High Risk, High Yield Debt

question 78

True/False

A junk bond is a high risk, high yield debt instrument typically used to finance a leveraged buyout or a merger, or to provide financing to a company of questionable financial strength.

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Definitions:

Federal Government

The national government of the United States, which consists of three branches: legislative, executive, and judicial.

Taxes

Compulsory financial charges or levies imposed by a government on individuals and organizations to fund public expenditures.

Budget Deficit

The situation where a government's expenditures exceed its revenues over a specific period, leading to borrowing or debt accumulation.

National Defense

Public or governmental efforts to protect a country and maintain national security through armed forces and defense strategies.