Some financial institutions are in danger because of their large holdings of corporate bonds, right?
This is because of the risk of corporate bankruptcy and default?
Because otherwise:
The corporation survives but is downgraded to junk; doesn't this increase the yield on the bonds ?
Doesn't the interest rate decrease increase the yield on the bonds?
Please correct any or all of this, I'm trying to get a grip and it's been a while since Macro. KIS, please.
This is because of the risk of corporate bankruptcy and default?
Because otherwise:
The corporation survives but is downgraded to junk; doesn't this increase the yield on the bonds ?
Doesn't the interest rate decrease increase the yield on the bonds?
Please correct any or all of this, I'm trying to get a grip and it's been a while since Macro. KIS, please.