Junk bonds became popular in the 1980s based on the idea that high risk firms failed only slightly more often than low risk firms.

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This statement is true. Junk bonds, also known as high-yield bonds, were created in the 1980s as a way for high-risk firms to raise capital. The idea was that although these firms had a higher risk of defaulting on their debt, they failed only slightly more often than low-risk firms. Investors were willing to take on this higher risk in exchange for the potential for higher returns.

Junk Bonds Became Popular in the 1980s Based on the Idea