ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -High-yield bonds are debt securities, also known as junk bonds, that are issued by corporations. They can provide a higher yield than investment-grade bonds, but they are also riskier investments.

Detailed explanation-2: -Junk bonds are a high-risk investment, but they offer the potential for higher returns than investment-grade bonds. Junk bonds, also known as high-yield bonds, are best suited for investors who are willing to take on more risk in order to achieve higher returns.

Detailed explanation-3: -Bonds rated below Baa3 by ratings agency Moody’s or below BBB by Standard & Poor’s and Fitch Ratings are considered “speculative grade” or high-yield bonds. Sometimes also called junk bonds, these bonds offer higher interest rates to attract investors and compensate for the higher level of risk.

Detailed explanation-4: -Fitch Ratings Bonds issued by companies with a credit rating of BB or lower by S&P or Fitch, or Ba or lower by Moody’s, are considered junk bonds. A fallen angel bond is debt originally issued by an investment-grade company that has since been downgraded to “junk” status by a credit rating agency.