What is the difference between an investment-grade bond and a junk bond?
What is the difference between an investment-grade bond and a junk bond?
Homework Answers
Bond with low credit rating with high proabability of default are called the junk bonds which means they need to issue at higher interest rate to investors to compensate for increased risk.
On the other side, investment grade bond are called the bonds with higher credit rating with low probability of default which means they are issued at low interest rate.
Junk bond are called high yield bonds and the difference on the interest rates between the investment-grade bond and a junk bond are called the spread.
the above is answer..
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What is the difference between an investment-grade bond and a
junk bond?
What ratings comprise investment-grade bonds and what ratings are used for junk bonds? What are the...
What ratings comprise investment-grade bonds and what ratings are used for junk bonds? What are the primary differences between the two? In particular, why are investment-grade bonds more marketable and why are junk bonds issued at all? Clearly state your answer to each problem. Answers without justification/explanation will not be given credit
What are the ratings of investment grade bonds, and at what rating does 'junk' begin? What...
What are the ratings of investment grade bonds, and at what rating does 'junk' begin? What factors separate the two types of bonds? Which type of bond do you think will pay higher interest?
Bonds are differently categories based on yield they generate. For example: high yield, investment grade, and...
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14. Junk bonds are bonds that are rated less than investment grade by bond-rating agencies a)...
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