Which Two of the Following Statements Relating to Credit Ratings

question 36

Multiple Choice

Which two of the following statements relating to credit ratings is correct?

• A) Investment grade debt is rated at B or above by Moody's.
• B) Non- investment grade bonds have ratings at, or below, Standard and Poors' rating BB+ (or Moody rating Ba1).
• C) Eurobonds have a Standard & Poors' rating of under ABB.
• D) Junk bonds are those which have a Standard & Poors' rating of under BBB (or a Moody rating of less than Baa).

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Definitions:

Liabilities

Financial obligations or debts that a company owes to external parties, which must be settled over time through the transfer of economic benefits.

Deferral

Accounting method to postpone the recognition of revenues or expenses until a future accounting period.

Journal Entry

A record in the accounting ledger that represents a transaction and its effect on various accounts, used for tracking and organizing financial data.

Accrual

Accrual is an accounting method that records revenues and expenses when they are earned or incurred, regardless of when the cash transaction actually takes place.