Understanding Corporate Bonds in the Bond Market

The bond market is a fundamental component of the financial system, with various types of bonds offering different features and risks. One significant type of bond is the 'corporate bond', which is issued by companies to raise capital for various purposes, such as expansion or research. These bonds can have different credit ratings, which reflect the issuer's creditworthiness. Understanding these distinctions is important for investors who aim to manage risks and optimize returns.

Based on this information, which of the following statements accurately describes corporate bonds?