Skip Navigation Links IRMI Online > Glossary of Insurance & Risk Management Terms > Terms > B > Brownian motion
Warning! You are currently not signed in. Any products you have purchased will not be displayed until you Sign In

Brownian motion

This expression refers to the tendency of high-yield (junk) bonds to experience a large diffusion component—that is, information relative to the bond's investment quality and pricing vis-à-vis the issuer's financial condition tends to filter down to investors gradually. This feature of high-yield bonds allows investors time to sell prior to default.


Social Media