high yield

Definition

Description of investments with high rates of return. Generally, a high yield bond will be ranked very low by a rating agency, because these are bonds which have a relatively high chance of default, and therefore have to offer higher returns. Similarly, a stock will offer a high dividend yield in order to compensate for lower expected capital gains, for example a large company in a mature industry which is no longer growing.

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Related Terms

corporate bond, junk bond

'high yield ' appears in the definitions of these terms on BusinessDictionary.com
 



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