
Investing 4: Bonds & Becky With the Good Yield
Planet Money Summer School
What Is a Junk Bond?
A junk bond simply is that issues det that is not investment grade. When companies dip into junk territory, they are considered really risky to lend money to. So the company issuing those bonds has to offer really high yields, really high interest rates on those bonds to attract investors. Normally, the bond market is considered very safe and not very profitable. The junk bond market is the exception to all this. It's risky and profitable. We were going to buy a junk bond. But why is it a bad idea? I mean, what is a junk bond?
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