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Meaning / Definition of

High-yield Bond

Categories: Investing and Trading, Statistics and Risk Management, Stocks,

High-yield bonds are bonds whose ratings from independent rating services are below investment grade. As a result, to attract investors, issuers of high-yield bonds must pay a higher rate of interest than the rates that issuers of higher-rated bonds with the same maturity are paying. The higher rate translates to more income, which is the higher yield.High-yield bonds may also be described, somewhat more graphically, as junk bonds.

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