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Finance allah shmoop what is investment grade Whoa whoa Really

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steve Not not investment grade No Oh alright much better

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This is investment grade Aren't enough of that Think about

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the quality of investment in a bond as relating tow

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How slippery the slope is on which investors are driving

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their investment returns when you get way Steep like here

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in the rocky mountains Well that's the land of c

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and d rated bonds And you make a lot of

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vertical progress As long as things don't go Ah arai

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like vertical progress Like you get very high interest rates

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for taking a lot of risk that these bonds go

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bankrupt They're not investment grade so yeah And things go

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awry Well you look like that guy All right So

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here's the map for grades of bonds brought to you

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courtesy of the kindly loving people at moody's and s

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and p rating services And you can see the block

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investment grade there from the three triple d minus there

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on up Well all of these are investment grade Meaning

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that at least historically the odds of any of these

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bonds going bad I e they stopped paying interest payments

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And investors don't collect well The odds of them failing

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are very low The whole notion of being investment grade

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means that the odds of getting your investment in the

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bond back plus all the interest payments are really high

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Their grade is for investors And with that certainty comes

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thie quote penalty unquote of lower interest rates or investment

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returns Because presumably in buying investment grade paper investors have

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taken last risk so they get less reward right Yeah

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and you know for those who eat risk for breakfast

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you know the sky's the limit and not always in 00:01:56.657 --> [endTime] a good way No

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