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

Settlement Risk

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

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Default Risk Premium (DRP)

Understand the meaning and definition of Default Risk Premium (DRP) 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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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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Underpricing

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

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Rate Of Return

Understand the meaning and definition of Rate Of Return in the context of stock market, trading, and investments.

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