
Most companies have some sort of bonds where they allow investors to purchase corporate bonds with a fixed rate of return. This allows the companies to create their own financing without affecting shareholders or going to banking institutions for the money.

Watch a live demo on corporate bond trading

Corporate Bond risk premiums are rising. Banks will need to assume more risk for fear to drop in the marketplace. The major volatility in the markets is adding to the fear premium.

Professor Francis Longstaff and student Eric Neis say the differences between corporate bond and treasury bond yields is accounted to more than just risk. Marketability and liquidity have a very strong influence in the

John Lonski from Moody's Capital discusses how the fall in corporate bonds is anticipating a severe recession in the US economy.

Explanation of how corporate bonds allow companies to issue debt to fund their operating needs. Investors allow corporations to borrow money in return for interest. You can purchase a corporate bond from a bank or other financial institution.

A corporate bond is a bond issued by major corporations and can be divided into five major groups: industrials, transportations, utilities, banks and other finance companies, and finally international. Bonds issued from the industrial sector would include manufacturing, mining, and retail oriented companies.