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What are aaa bonds?
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3rd Nov 2009 by Daniel Cross, ChFC
Bonds are rated according to the underlying risk associated with them. A rating of AAA or Aa1 is considered the highest rating that there is, and therefore the least risky to invest in. Investment grade bonds range from AAA, AA, A, to BBB. Generally anything less than BBB is labeled as a high-yield bond, or more familiarly "junk" bonds. The two largest rating agencies are Moody's and Standard & Poor's, although they have come under fire since rating certain Mortgage CMO's AAA when in reality they were essentially worthless assets that were partially responsible for the housing bubble crash in recent years.
Bonds are rated according to the underlying risk associated with them. A rating of AAA or Aa1 is considered the highest rating that there is, and therefore the least risky to invest in. Investment grade bonds range from AAA, AA, A, to BBB. Generally anything less than BBB is labeled as a high-yield bond, or more familiarly "junk" bonds. The two largest rating agencies are Moody's and Standard & Poor's, although they have come under fire since rating certain Mortgage CMO's AAA when in reality they were essentially worthless assets that were partially responsible for the housing bubble crash in recent years.
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