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Q: Why would someone invest in a junk bond?
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Is a zero coupon bond a junk bond?

depends on the collateral supporting the bond.


Is Altmark Holdings Bond legitimate?

It does not appear as quoted company on FT screens. Looks like junk bond to me, at 14% they would be buried in applications from their own country alone.


What type of bond is most likely to default?

Junk bonds


What is a high yield bond fund?

High yield bond ( Junk bonds) funds own the debt of companies with less than stellar credit. The yield is higher to compensate the the increased risk that the fund and its investors are more likely to lose money as compared to a bond fund holding higher rated debt.


How are Savings bonds different from other bonds?

There are two kinds of bonds: coupon and zero-coupon bonds. A coupon bond pays interest on a periodic schedule--and what the schedule is depends on the bond. When you get the bond, it's got a certain number of coupons attached to it. Each one is dated and says how much interest you will receive when you redeem it. The main part of the bond is the corpus--the "body"--and when redeemed, you will receive the money you spent to buy the bond back. If you buy an investment-grade coupon bond, and its face value is $1,000, you need $1,000 to buy the bond. Note I said "investment-grade" here. If you buy a coupon bond that's in the junk category, quite often they sell at a discount from face value. But junk bonds are a world of their own. Savings bonds are zero-coupon bonds. They sell at a discount from face value--right now it's 50 percent, so if you want a $100 savings bond you need to bring $50. When the bond matures and is redeemed, you will receive the face value of the bond. There are no periodic interest payments with these bonds.

Related questions

What type of bond is a junk bond?

A junk bond is one which is of very high risk. This type of bond will mean that a person may never get the money back which they invest into the bond itself.


Why would investors buy a junk bond?

Firsly investors buy junk bond because they are cheaper.Although they have higher risk of default they also have higher return.


When was Junk Bond Observatory created?

Junk Bond Observatory was created in 1996.


Why would a person invest in junk bonds-?

"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)


What is a silver lock bond?

junk bond


Type of bond that is exceptionally risky?

junk bond


Is a zero coupon bond a junk bond?

depends on the collateral supporting the bond.


Why would investors buy junk bonds?

Firsly investors buy junk bond because they are cheaper.Although they have higher risk of default they also have higher return.


Is Altmark Holdings Bond legitimate?

It does not appear as quoted company on FT screens. Looks like junk bond to me, at 14% they would be buried in applications from their own country alone.


What is a low rated potentially high paying bond?

A low-rated, potentially higher-paying bond is a junk bond.


Is it a good idea to purchase a junk bond considering the current economy?

Purchasing one can be good for you depending on your financial situation. But if you don't have the funds to invest right now you may want to hold off until things pick up.


What type of bond is most likely to default?

Junk bonds