junk bond

Definition

A high-risk, non-investment-grade bond with a low credit rating, usually BB or lower; as a consequence, it usually has a high yield. opposite of investment-grade bond.

Use junk bond in a sentence

You may want to try and find a junk bond to invest in if you are looking for a new place to put your money.

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We had decided to purchase junk bonds as we wanted the high interest rate to provide a cash inflow this quarter.

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Though junk bonds typically offer a far greater interest rate relative to investment grade securities they also carry substantially greater risk.

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