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Are high yield bonds safe and and are they insured by the Federal Government?
Wiki User
∙ 12y ago
High-yield bonds are risky because they have lower credit quality and there are several events that could cause the price to decrease. They are not insured by the Federal Government.
Wiki User
∙ 12y ago
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What are the bond types from lowest to highest yield?
The different types of bonds includes Treasury bonds which are released by US government. Agency bonds which are issued by organizations registered or affiliated with US Federal government, municipal bonds which are issued by counties or cities have medium to low yield, Corporate bonds which are issued by companies, have high yields, high yield bonds which are issued by corporations.
When are price and yield of government thirty-year bonds determined?
Price and yield are determined at auction.
If corporate bonds issued by Johnson Corporation currently yield 8 Municipal bonds of equal risk currently yield 6 At what tax rate would an investor be indifferent between these two bonds?
To find the federal tax rate at which the buyer would be indifferent between Muni bonds(which are tax free) and Corporate bonds(which fall under your tax bracket tax rate) you follow this simple formula: Corporate Bond Yield=(Municipal bond Yield)/(1- Federal tax rate) In this case you would solve for the Federal Tax Rate and get an answer of .25 or 25% http://luhman.org/Nts/Bond/140_Municipals.html
What is the difference between junk bonds and traditional bonds?
A junk bond is any bond with a BB or below rating. Also called high-yield bonds, they can become this way following one of two paths. In the days before Michael Milken, investment-grade bonds became junk because of various downturns in a company's fortune. Milken's great innovation, the one that made him so rich he could pay a billion dollars in fines to the federal government and still be rich, was creating bonds that started out life as high-yield paper.
What happens when a yield to maturity is less than the yield to call?
The issuer will call the bonds and issue new bonds to the maturity date.
What do I need to know about high yield investments?
Yes, high yield investments which are also called junk bonds, are quite risky and that is why they pay higher yields. Safer investments will have lower yields, and include AAA and AA rated corporate bonds, government bonds, as well as Certificates of Deposit (CDs) among others.
Where can one find high yield municipal bonds?
Someone that is looking for information on high yield municipal bonds, can do so by researching with websites such as About, Wikipedia, as well as Learn Bonds.
Does the yield to maturity represent the promised or expected return on the bonds?
The yield to maturity represents the promised yield on a bond
What are the different types of yields on bonds?
* yield to worst (to maturity or to call date) * current yield * coupon yield
What are the benefits of high yield bonds?
The best benefits of high yield bonds are they are issued by low credit organizations, they are a leading agency, and they work to protect your debt .
What is the risk involved with high yield bonds?
The major risk with high yield bonds is losing all of your money you invest. These type of bonds have a very low rating much lower that the investment grade.
When a bonds yield to maturity is greater than the bonds coupon rate the bond?
When the yield of a bond exceeds it coupon rate, the price will be below 'par' which is usually $100.
