The less risky the bond (or the higher the bond rating)the lower will be the yield to maturity on the bond.

Question

Quizplus · Accepted Answer

This is a fundamental principle of bond pricing. Investors are typically willing to accept lower yields on bonds that are perceived to be lower risk, such as those with a high credit rating from a reputable credit agency. Higher-risk bonds, on the other hand, typically offer higher yields to compensate for the added risk.

The Less Risky the Bond (Or the Higher the Bond