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High risk bonds are called junk bonds.
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∙ 11y ago
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How does the risk or return ratio of a government bond compare with that of other types of investments?
The risk of a government bond is minimal, though the return from the government bond is very low compared to other lucrative bonds available in the market.When you opt for more return, there is more risk. Whereas though in government bond, the return is low, your investment is well secured and risk ratio is almost nil.
What is the graph of the efficient frontier?
The Efficient Frontier is a graph that shows the portfolio (combination of stocks and bonds) that would give you the highest return at each level of risk. Any point above that is unattainable without a change in risk, any point below is inefficient (that is you could receive greater return for that mix of stocks and bond then you are currently receiving).
What type of risk is the risk that a bond will decrease in value when interest rates in the economy rise inflation or deflation or by interest rate or financial?
Increases in Expected Future Interest Rates (forward rates) as well as adverse changes in those influences that might cause future interest rates to be higher than expected, such as higher inflationary expectations will typically cause secondary market prices for bonds to go lower.This is a kind of Market Risk (risk to the Market Price of an investment) and can has a sensitivity that is typically measured using Modified Duration. Definitions of these terms can be found at www.davidandgoliathworld.com
Why market value of a bond will fall when the interest rate rise on new bonds of equal risk?
Because the bond is no longer making money at the rate of current prices. Its future value is less than other equally face bonds so its market price dropes to compensate
What is usually a better investment- a coupon bond or discount bond?
Coupon bond= pay $A now. receive future periodic coupon and at maturity receive face value Discount bond= pay $B now. receive nothing until maturity where you receive face value. B is always less than A. That is, you pay less upfront investing in Discount Bond compared to Coupon Bond. But, you don't receive periodic cash flow by investing in Discount Bond. So clearly which is better depends on how much money you have at present and your expectation of future interest rate (going up or down). If you expect interest rate/yield to go down in the future, then clearly you don't want to be sitting on a pile of money and earn meager interest on it. This is called re-investment risk. You risk having unfavorable interest rate to re-invest the cash flow (coupon) you'll get in future. In this case, locking in the current interest rate/yield by buying discount bond is preferable. The same logic apply if you expect interest rate/yield is going to rise, in which case buying a coupon bond is preferable since you can re-invest the cash flow (coupon) you'll get in future at a higher rate. You can't do so with Discount Bond coz you receive no payment and the interest/yield is locked.
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.
What type of EMS call presents the highest risk of liability for the EMT?
Risk and liability in ems
Order the bond types below from lowest to highest risk of default?
There are no bond types below your question; It is impossible to answer your question.
What type of bonds will have the highest electrical and thermal conductivity?
i think ionic bond why because if more ions are there more is the conductivity.
Does a stock or bond represent more risk to the company?
A share is more of a risk than a bond.
Which type of bond carries the least amount of risk?
US Treasury bonds are often considered the least risky type of bond because they are backed by the full faith and credit of the US government. This means that there is a very low risk of default when investing in US Treasury bonds.
When is the risk for babesiosis highest?
The risk for babesiosis is highest during June and July
What type of loan have the highest interest rate?
Unsecured loans to high-risk creditors for dubious purposes.
What type of loan will have the highest interest rate?
Unsecured loans to high-risk creditors for dubious purposes.
When is risk highest in project management?
The risk is highest usually in the execution phase, risk is proportional to the timeline of the project.
Is there a high risk when one is new to investments?
There is high risk when one is new to investments, depending on the type of investment they are making. If it is a savings account, or a government bond, there is less risk than opposed to shares and options.
Can bond ratings be used as a measure of the bond's risk?
Yes OR true
