Junk bond appeal to some investors because of higher yields and potentially higher capital gains than those offered by investment grade bonds.

Question

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Junk bonds typically come with higher yields because they are considered riskier investments than investment grade bonds. As a result, investors who are willing to take on more risk may be attracted to the potential for higher returns in the form of both interest payments and capital gains.

Junk Bond Appeal to Some Investors Because of Higher Yields