"High-yield" is the marketing term used for lower-quality corporate bonds that are rated below investment grade (i.e., the top four grades issued by rating firms such as Moody's and Standard & Poor's) and the bond mutual funds that invest in them. The more colloquial term used to describe these investments is "junk bonds." Investors purchase high-yield bonds to obtain high current income. The trade-off is that high-yield bonds have a higher risk of default than bonds with higher ratings.
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