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-U.S. Treasury bonds

-Corporate bonds

-Junk bonds

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9y ago

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Order the bond types below from lowest to highest risk of default?

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From lowest to highest yield, the typical bond types are: US Treasury bonds, US corporate bonds, municipal bonds, high-yield bonds, and emerging market bonds. The order is generally based on the credit risk associated with each type of bond, with US Treasury bonds considered the safest and typically offering the lowest yield.


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What are the bond types from lowest to highest yield?

Bonds are categorized based on their risk and return characteristics, with higher risk typically associated with higher yields. Here’s a ranking of bond types from lowest to highest yield: Treasury Bonds: Issued by the government, these are considered the safest investments since they are backed by the full faith and credit of the government. Examples include U.S. Treasury bonds and bills, offering the lowest yields due to their minimal default risk. Municipal Bonds: These are issued by state or local governments to fund public projects. They typically have slightly higher yields than Treasury bonds but remain relatively low due to their tax-exempt status for U.S. investors. Investment-Grade Corporate Bonds: Issued by financially stable companies, these bonds have a higher yield than government bonds. Their credit ratings are typically BBB or higher, reflecting low default risk. High-Yield Corporate Bonds (Junk Bonds): Issued by companies with lower credit ratings (BB or below), these bonds offer higher yields to compensate for increased risk. Emerging Market Bonds: Issued by governments or corporations in developing countries, these bonds provide the highest yields to attract investors, as they carry significant political, currency, and economic risks. Investors should assess their risk tolerance and financial goals when choosing bonds, as higher yields often come with increased risk.


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