Bonds: Risk, yield and spreads (my job)

STOCK
Assessing two main risk: market risk and stock specific risk
BOND
Assessing two main risk: market risk and “credit risk”
Market risk: Market risk in the bond market is the fear that accelerating inflation, a credit crunch or central bank intervention will send interest rates higher and the prices of debt securities lower.
Credit risk is the potential for the credit ratings of the company issuing the bond you intend to buy being reduced or eliminated, should the company's perceived ability to service its debt either diminish or disappear
MEASURING CREDITWORTHINESS
Corporate: many statistical measures
Government: somewhat different set of measurements
CREDIT RATING
4 rating agency Dominion Bond Rating Service (DBRS), the Canadian Bond Rating Service (CBRS), standard & Poor’s, and Moody]
A change in rating can have a pretty significant effect on the rate at which a country, province or corporation can raise money in the capital markets
The highest rating is pretty nearly always the debt of a central government
BOND YIELDS
Corporate bonds generally have lower ratings and higher yields.
YIELDS SPREADS
Yield spread, is depend on the investors decision. Because, there are different return and also different risk.
It can never be absolute comparisons. In practice, there are other significant differences between the federal, provincial, municipal and corporate bond markets. DIVERSIFICATION
In most instances, the need will be to achieve some diversification of the risk of a pure stock portfolio