Depends on the individual bond. Look for the date on the certificate.
Interest rates increase as perceived risk increases. Government bonds have virtually no risk. Junk bonds are so called because they carry a high risk of default.
-U.S. Treasury bonds -Corporate bonds -Junk bonds
no
"Junk" bonds pay a higher interest rate than high-quality bonds, in order to compensate for the risk of default. junk bonds can pay very high interest rates (gradpoint)
The issuer will call the bonds and issue new bonds to the maturity date.
Different bonds have different maturity dates. Additionally, there are different type of bonds, some provide interest based on the face value, and some provide the face value upon maturity.
callable bonds
30?
High risk bonds are called junk bonds.
One advantage of purchasing junk bonds is it allows one to diversify investments over a larger group of different assets. The biggest benefit is they carry a high yield. However, junk bonds are also very high risk.
To find the maturity risk premium on corporate bonds, we can use the following formula: Corporate bond yield = T-bond yield + Maturity risk premium + Liquidity premium. Given the yields, we have: 7.9% = 6.2% + 1.3% + 0.4%. This indicates that the maturity risk premium accounts for the difference in yields between T-bonds and corporate bonds, confirming that the corporate bonds include both the maturity risk premium and the liquidity premium.
Junk Bonds