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:

Illusory Promise

A statement that appears to be a promise but is too vague or lacks commitment to be legally binding and enforceable as a contract.

Promissory Estoppel

A legal principle preventing a party from withdrawing a promise if the other party has reasonably relied on that promise to their detriment.

False Pretenses

The act of knowingly making untrue statements or deceiving others to obtain goods, money, or services unlawfully.

Mutual Exchange

An agreement where two parties exchange goods, services, or other considerations of value, with each party benefiting from the transaction.