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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Junk bonds have a higher risk of default but offer higher yields to compensate for the risk. They are commonly used for financing mergers and acquisitions and for companies with weaker financial profiles.

Junk Bonds Are High Risk, High Yield Debt Instruments