Rated AAA to BBB. These are stable companies with low default risk.
Buying shares of a diversified basket of bonds. This offers instant diversification and professional management with a much lower entry cost. 5. Risks Involved buy corporate bonds
Investors typically turn to corporate bonds for three primary reasons: Rated AAA to BBB
The difficulty of selling a bond quickly at a fair price before it matures. Rated BB or lower
Rated BB or lower. These offer higher interest to compensate for the significant risk that the company might fail to pay. B. Interest Rate Environment
A corporate bond is essentially a loan an investor makes to a company. In exchange for this capital, the corporation agrees to pay a set rate of interest (the ) for a specific period. When the bond reaches its maturity date , the company returns the principal amount (the par value ) to the investor. 2. Why Buy Corporate Bonds?