High-Yield Bonds are…

August 5th, 2009

High-yield bonds are bonds that have relatively high interest rates in exchange for having greater risk attached. Basically, because high-yield bonds have less security, the organizations that offer them attach higher interest rates as an incentive to buy. High-yield bonds are often called “junk bonds.” Bonds are classified as “junk” when they have a risk rating of Ba, BB, or lower.

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