Which One of the Following Statements Concerning Bond Ratings Is

question 327

Multiple Choice

Which one of the following statements concerning bond ratings is correct?

• A) Standard and Poor's and Value Line are the primary bond rating agencies.
• B) Bond ratings are solely an assessment of the creditworthiness of the bond issuer.
• C) Investment grade bonds include only those bonds receiving one of the highest three bond ratings.
• D) Bond ratings evaluate the expected price volatility of a bond issue.
• E) All bonds receive the same rating classification from all rating agencies.

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Definitions:

Sensitive

Capable of perceiving with the senses or responsive to stimuli or changes in the environment.

Demand

The desire to purchase goods and services backed by the ability and willingness to pay a price.

Economic Theory

A set of principles that explain how economic processes work, guiding the analysis of economic behavior and decision-making.

Relatively Inelastic

Term indicating that the demand or supply for a good or service changes only slightly in response to changes in price.