True or False: Investment grade rated bonds have the highest risk.

Investment grade rated bonds are considered to have a lower risk profile compared to high-yield or junk bonds. This classification indicates that these bonds are issued by borrowers who are perceived to have a strong capacity to meet their financial commitments, primarily in terms of timely interest payments and principal repayment. The ratings are provided by credit rating agencies and typically include categories such as AAA, AA, A, and BBB, indicating varying levels of credit risk.

Investors generally view investment grade bonds as safer investments, which is a significant reason for their popularity among conservative investors seeking stable income. Higher risk is associated with lower-rated bonds, as they may be more likely to default. Thus, the statement that investment grade rated bonds have the highest risk is false, reinforcing the idea that they are a more secure option in the bond market.