Fixed Income

Junk bond

A high yield bond, also known as a junk bond, is a type of bond that offers a higher rate of return due to its higher level of credit risk. This means that the issuer of the bond has a lower credit rating, making it riskier for investors. However, this higher risk also comes with the potential for higher returns. It is important for investors to carefully consider the credit risk associated with high yield bonds before making any investment decisions.

Related terms

Credit Spread

Understand the meaning and definition of Credit Spread in the context of stock market, trading, and investments.

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Sinking Fund

Understand the meaning and definition of Sinking Fund in the context of stock market, trading, and investments.

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Par

Understand the meaning and definition of Par in the context of stock market, trading, and investments.

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Bid-Ask Spread

Understand the meaning and definition of Bid-Ask Spread in the context of stock market, trading, and investments.

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Liquidity

Understand the meaning and definition of Liquidity in the context of stock market, trading, and investments.

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Risk Neutrality

Understand the meaning and definition of Risk Neutrality in the context of stock market, trading, and investments.

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