, than those on investment grade bonds.12 Junk bonds, on the average, were yielding almost 50 basis points per month more than investment grade bonds.13
It was also found that the higher return on junk bonds more than compensated for the systematic risk associated with the securities.14 Further, it was found that the term of issue of junk bonds tended to be lower than that for investment grade bonds.15 The shorter terms are a means of reducing the risk associated with junk bonds.
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