Corporate bond yields and liquidity risk

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Reference no: EM132618796

Topic: Corporate Bond Yields and Liquidity Risk: An Analysis of U.S market and Bangladesh market

What are the determinants of returns on corporate bonds?

Since corporations may default, the returns on their bonds must incorporate a premium for such risk. For safe (so-called "investment-grade") bonds however, the risk of default is very low (less than 0.1%) and cannot explain the returns observed. What other factors are at play? Does market liquidity risk affect the pricing of corporate bonds? How are the yields of Bangladesh corporate bonds determined?

Reference no: EM132618796

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