Higher Yield Corporate Bonds

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Presumably some companies' bonds are more risky than others? Quite so. That is where the higher-yie...

Presumably some companies' bonds are more risky than others? Quite so. That is where the higher-yield bit comes in. The less financially secure the company - as measured by its credit rating, which on the measure used by ratings agency Standard and Poor's can range from AAA for the most secure to C for the most likely to default - the higher the coupon it will have to offer to compensate investors for the risk they are taking on. I see. Is this what people mean by "junk bonds"? Well, nobody really calls them junk bonds any more. The sector has grown enormously in the past decade, beginn...