A fuller guide to this term is on the way. In the meantime, the related terms below explain the ideas around it.
Related MoneyPedia terms
- Credit RatingA grade from rating agencies that signals how likely a bond issuer is to repay its debt.
- Junk BondA bond from a lower-rated issuer that pays higher interest to make up for a greater chance of default.
- Corporate BondA loan you make to a company that pays interest and generally offers higher yields but more risk than government bonds.
- BondA loan you make to a government or company that pays you interest and returns your money on a set date.
- Investment GradeA quality tier for bonds from issuers considered financially strong and likely to repay their debt.
- YieldThe income an investment pays you each year, shown as a percentage of its current price.
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Plain-English education — not personalized legal, tax, or investment advice.