What is a junk bond?

Junk. Not a nice word. And when it comes to bonds, not a particularly accurate word, either. Junk is something useless, right? Something you want to toss in the trash? Well, "junk" bonds are definitely not useless. In fact they're extremely useful. Sometimes. Marketplace Money Senior Producer Paddy Hirsch explains what a junk bond really is.

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Category:

News & Politics

Tags:

• junk bond bonds Whiteboard
• junk bonds
• Marketplace
• finance
• markets

[moviematcanada]

@sechun86

I can't get my 27 & 28 yr old Step daughter and Husband to watch anything to increase their awareness to the coming collapse.

They believe if they lick their I-Crap it will give them all the nutrition they will ever need.

They can spend hours on FaceCrap but can't pay attention to a 4 min video.

I'm worried for their children but have given up on the parents though, I think they need to truly suffer but then it will be too late for them.

[sechun86]

I don't know why videos like this don't have view counts comparable to Lady Gaga's semi nude music videos.... It explains partly why our our economy the way it is.

[SmackNcrack01]

@houdapurple true, i think the give away that i was drunk was the way i spelt start as 'styart', this must of made me belligerent to paddy and maybe even jealous??? lol

i'll shut up from now on as he is a great teacher!

[houdapurple]

@SmackNcrack01 that's mean , i think he's quite handsome and most importantly he does a great job teaching us so hush lol

[merchantsailor]

can you describe a convertible bond, what is coupon and how is yield calculated?

[TheMultighoul]

@silhouette1998 The Fact that you can understand this stuff and/ or interested in it. You are probably gonna be a Millionaire by the time you are 23.

[richkidsmartkid]

you are doing an excellent job and a big favor for me, and a lot of ppl I suppose. So, all I wanna say is: Thank you!!!!

[SoyAussie]

i dont get why these high-quality bond companys would give low returns on bonds??? if they are good companys with alot of money, wouldnt they be able to pay a higher yield???and vice versa...how would "junky" companys be able to pay out a high yield?

[deadbirdflyinghome]

Is it just me or is the whole bond market an example of greed and injustice? I mean, why not good companies pay 15% yield because they can afford it, and troubled companies pay 2% because they're broke? Isn't this what kills a country? A country like Greece is broke, given junk status, and now must pay yields through the nose, effectively making it MORE broke. I lend Millionare Jim $100 and expect $102 back. I lend poor joe $100 and expect $115 back. The world is cruel, we need reform.

[noetherianring]

Very badly, needing a drink.