Right. It is very risky.
But the same can, of course, be said for a similar bond that you buy for $100, that will be worth the same $100 at maturity, but which pays
70% annual interest. Economically it is the same thing. And any bond paying 70% interest must have a high likelihood of default before the 3 years are up.The key differentiation between interest-like investments and capital- gain-like investments is whether the return is fixed in advance. If it is fixed, even if risky, then it really is more bond-like than stock-like. And also whether the issuer has an obligation to pay regardless of how well or poorly the company does (short of bankruptcy...)