Where Credit Is Due: A Look at the Ratings
There are many factors that individuals must consider when making investments in fixed-income securities. Current bond yields, current bond prices, and current as well as future interest rates all may have a big impact on the return of a fixed-income investment.
One other factor investors need to evaluate is the credit quality of the issuer and the particular bond. Individuals investing in fixed-income securities typically have two major concerns:
- How likely am I to get my money back at maturity? and
- How likely am I to get my interest payments on time?
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