True or False: Speculative grade bonds have higher risk than investment grade bonds but lower risk than highly speculative bonds.

The statement is accurate because it reflects the general classification of bonds based on their credit quality and associated risk. Speculative grade bonds, often referred to as junk bonds, are rated below investment grade, indicating a higher probability of default compared to investment grade bonds. However, within the spectrum of bond risk, speculative grade bonds are not the most risky category. Highly speculative bonds, which may have even lower ratings or be unrated, carry a higher risk than speculative grade bonds. This hierarchy of risk illustrates the varying levels of creditworthiness among bonds, organizing them from lower risk with investment grade bonds to higher risk with highly speculative bonds. Therefore, the description of speculative grade bonds having higher risk than investment grade bonds but lower risk than highly speculative bonds is correct.