Junk Bonds



Junk Bonds

Introduction

The basic purpose of this essay is to analyze and assess the risks and return associated to investing in Junk bonds and throws light on strategies to have an appropriate mix of fixed income securities to diversify the high risk associated to the junk bonds. A junk bond is similar to the usual bonds except for the fact that it has poor credit rating. There are mainly two types of bonds investment grade and junk bonds under this category. The investment grade bonds are similar with respect to nature of risk i.e. defaulting over principal payment and interest ...