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Corporate bonds are an attractive vehicle for investors for several reasons:
First, because companies that issue bonds, belonging to different sectors of the economy, the investor has the right to choose and, thus, can secure the diversification of investment risk. Backup/copy open files from network share on a NAS device
Second, the corporate bond market is large enough and liquid (which is not yet fully applies to the Ukrainian market). This means that if an investor needs to sell bonds, it will be able to do so until maturity.
Thirdly, corporate bonds usually have higher returns than government bonds or bank deposits for the same period of circulation.
Bond prices are working closely with interest rates on them. If interest rates grow, bond prices fall. When interest rates rise, new bond issues come to market with a higher yield than the previously released editions, which are already among investors. Thus, the price of previously issued bonds decreases.
If interest rates fall, bond prices rise. When interest rates decline, new bond issues come to market with a return that is less than the return of previously issued bonds. Therefore, the price of previously issued bonds are rising.
Bond yields are closely dependent on their maturity. World practice functioning bond market shows that yield the same bonds with different maturities differ. In most cases, long-term bonds are riskier than short-term. It is clear that the investor will demand additional compensation for the risk associated with the purchase of long-term bonds. This leads to the fact that the profitability of long-term bond yields over similar short-term bonds.