Definition of «junk bonds»

Junk bonds are a type of high-yield bond that is considered to be of lower quality than other debt instruments. These bonds typically have a higher risk of default and offer higher yields as compensation for this increased risk. They are often issued by companies with poor credit ratings or those that are in financial distress, making them more speculative investments.

Sentences with «junk bonds»

  • One - year returns of junk bond funds averaged 20 % in 2003 after a two - year slump, tracking the stock market rebound. (aaii.com)
  • It's hard to argue that the modest fall in junk bond prices suggests that a larger correction is imminent. (charlessizemore.com)
  • If you decide to pour your entire life savings into a high yield junk bond fund or stock that I mention and it tanks, don't come crying to me. (dividendquest.com)
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