Question
Why do noninvestment-grade bonds have much higher direct costs than investment-grade issues?
Step 1
Noninvestment-grade bonds, also known as high-yield or junk bonds, are issued by companies with lower credit ratings. These companies have a higher risk of defaulting on their debt obligations compared to investment-grade issuers. Show more…
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Why are bonds somewhat risky to buy, even though they make predetermined payments based on a fixed rate of interest?
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