6min chapter

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Investing 4: Bonds & Becky With the Good Yield

Planet Money Summer School

CHAPTER

The Dark Side of Junk Bonds

Junk bond holders are really far back in the line if a company goes under. Even though we bought a junk bond, regular investment grade bonds also do have default risk. You're probably going to get paid back. But there are other risks that people should know about when investing in bonds too. One of the biggest risks is interust rate risk. The value of the bond your holding goes down when interest rats go up.

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