High Yield Bond
A bond that pays a higher interest rate than investment-grade bonds to compensate investors for the higher risk of default. High-yield bonds, also known as junk bonds, are issued by companies with lower credit ratings or higher levels of debt
Hedging
A strategy used to reduce or eliminate the risk of adverse price movements in an asset. Hedging involves taking offsetting positions in related assets to protect against losses from unfavorable price changes.
Hedge Fund
An investment fund that pools capital from accredited investors and institutional investors to invest in a variety of assets using different strategies. Hedge funds often use leverage and derivatives to amplify returns and manage risk.