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The difference between rates for first-class government bonds and investment-grade bonds is called investment-grade spread. The range of this spread is an indicator of the market's belief in the stability of the economy. The higher these investment-grade spreads (or risk premiums) are, the weaker the economy is considered.
As such, it can pay to go with investment-grade bonds, which have earned a high rating from credit-rating agencies. Bonds such as Treasurys and U.S. savings bonds, however, are backed by the full ...
Investment-grade bonds come with at least a BBB- rating (or Baa3 from Moody's) from credit rating agencies. These bonds are believed to have lower credit risk than their high-yield counterparts ...
Moody's Ratings, previously known as Moody's Investors Service, often referred to as Moody's, is the bond credit rating business of Moody's Corporation, representing the company's traditional line of business and its historical name. Moody's Ratings provides international financial research on bonds issued by commercial and government entities.
The Bloomberg US Aggregate Bond Index is a market capitalization -weighted index, meaning the securities in the index are weighted according to the market size of each bond type. Most U.S. traded investment grade bonds are represented. Municipal bonds, and Treasury Inflation-Protected Securities are excluded, due to tax treatment issues.
Diversification: Corporate bonds come in a wide variety of types, depending on maturity (short, medium and long) and rating quality (investment-grade or high-yield). A bond ETF allows you to buy ...
v. e. A corporate bond is a bond issued by a corporation in order to raise financing for a variety of reasons such as to ongoing operations, mergers & acquisitions, or to expand business. [1] It is a longer-term debt instrument indicating that a corporation has borrowed a certain amount of money and promises to repay it in the future under ...
The junk bond rating means that there is a greater risk that the issuer will default on the debt, relative to investment-grade bonds. As a result of this increased risk, junk bonds offer a higher ...