Junk Bonds

Are you a risktaker? Do you like the thrill of the unknown? If so, junk bonds, also known as high-yield bonds, may be the investment for you.

What Are Junk Bonds?

When you buy a bond, you are lending your money to someone (the government or a private company) who promises to pay you back when the bond matures, plus interest. The ability of the bond issuer to meet its obligation is expressed in the bond's credit rating. Whether a company defaults on its bonds or not depends on its ability to pay back its debt. Bonds that have a high credit rating are known as investment-grade bonds. Bonds that are likely to default are called speculative or non-investment grade. Low-grade bonds may be issued by companies without long track records, or with questionable ability to meet their debt obligations. Because most brokers do not invest in these low-grade bonds, they are known as junk bonds. However, because of the very high interest rates these bond issues typically offer,......

Join Now to view the rest of this term paper!
Members: Login to view this research paper.

Title: Junk Bonda
Approximate Word Count: 1224
Approximate Pages: 5 (250 words per double-spaced page)

With the Term Papers Lab Membership Pass, you get instant access to every essay on this site, including this essay on Junk Bonda, for as long as you remain a member.

Other essays sites charge almost $100 for a single term paper. At Term Papers Lab, you can get instant access to over 100,000 research papers for as little as $29.95!