Posted by & filed under Market Analysis.

Description: High-yield corporate bonds are being priced as if few of these companies are going out of business, evidence that income-seeking investors are increasingly accepting the greater risks attached to low-rated debt.

Source: Marketwatch.com

Date: 02/14/2010

Link:  http://www.marketwatch.com/story/high-yield-bonds-show-investors-the-money-2010-02-12

Questions for discussion:

  • Summarize the current market conditions for corporate bonds.
  • How should financial managers deal with these conditions? 
  • How would you advise investors? 
  • Do you agree with the statement that “Investors are willing to lower their standards” of how much protection a bond offers in order to improve returns? Explain your thinking.

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