Bond issuers tend to offer higher interest rates and coupons to offset their higher default risks.
Not exact matches
But when hard times hit an
issuer, its stock and
bond values
tend to decline.
The S&P 500 High Yield Corporate
Bond Index tracks the junk
bonds of
issuers of the S&P 500 and as the yields indicate, on average, they
tend to be better quality than the
bonds in the broader index.
Junk -
bond issuers — those with low credit ratings —
tend to sink or swim with the health of the economy.
Yields on callable
bonds tend to be higher than yields on noncallable, «bullet maturity»
bonds because the investor must be rewarded for taking the risk the
issuer will call the
bond if interest rates decline, forcing the investor to reinvest the proceeds at lower yields.