Which of the following statements is true of junk bonds?

A) They are short-term liabilities.
B) They are a sequence of small bond issues of progressively longer maturity.
C) They have low inherent risks.
D) They are typically associated with companies in good financial health.
E) They offer relatively high rates of interest.

Junk bonds offer relatively high rates of interest to compensate for their higher risk of default compared to investment-grade bonds. They are not necessarily short-term, nor are they characterized by a sequence of issues of progressively longer maturity. They are associated with higher inherent risks and are typically issued by companies that are not in strong financial health.