Issuers of bonds that are __________ yield are __________ likely to default on their repayment obligations:
Question
Issuers of bonds that are __________ yield are __________ likely to default on their repayment obligations:
Solution
The sentence seems to be incomplete, but I can provide a general answer based on the information given.
Issuers of bonds that are high yield are more likely to default on their repayment obligations.
Here's why:
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High yield bonds, also known as junk bonds, are bonds that pay higher interest rates because they have lower credit ratings than investment-grade bonds.
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Lower credit ratings mean the bond issuer is more likely to default on their repayment obligations.
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The higher interest rate is to compensate for this additional risk.
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Therefore, issuers of high yield bonds are more likely to default on their repayment obligations.
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