Junk Bond

What Does Junk Bond Mean?
A bond rated 'BB' or lower because of its high default risk.

Also known as a "high-yield bond" or "speculative bond".

Investopedia explains Junk Bond
These are usually purchased for speculative purposes. Junk bonds typically offer interest rates three to four percentage points higher than safer government issues.

Related Terms

Bond
Bond Rating
Credit Quality
Default Risk
High-Yield Bond
High-Yield Bond Spread
Internote
Investment Grade
Speculative Risk
Vulture Fund
More Related Terms

Related Links

Junk Bonds: Everything You Need To Know - Don't be fooled by the name - junk bonds may be for you if you know how to analyze them.
Common Mistakes By Fixed-Income Investors - Avoid these errors made daily in bond portfolios everywhere.
Can You Invest Like Carl Icahn? - Buying up failing investments and turning them around helped to create the "Icahn lift" phenomenon.
Bonds For Every Stage Of Life - Fixed-income investments can be part of your portfolio at any age. Find out how.
High Yield, Or Just High Risk? - Despite their reputation, the debt securities known as "junk bonds" may actually reduce risk in your portfolio.
Mutual Funds: Different Types Of Funds - Find the fund to fit your investing style.
Corporate Bonds: An Introduction To Credit Risk - Corporate bonds offer higher yields, but it's important to evaluate the extra risk involved before you buy.
Top 4 Most Scandalous Insider Trading Debacles - Here we look at some of the landmark incidents of insider trading.
Bond Basics Tutorial - Investing in bonds - What are they, and do they belong in your portfolio?
What does investment grade mean?
Are high-yield bonds better investments than low-yield bonds?

Rate this Term: Your Rating: Overall Rating: Vote Now!