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One of the Bond Rating Agencies Ran into Controversy When

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Essay

One of the bond rating agencies ran into controversy when it began rating bonds of some companies without their approval. Many of the companies whose bonds were rated in this manner were upset by this. Why do you think a company would be unhappy to receive a "free" bond rating?


Definitions:

Standard Normal Curve

The graphical representation of a normal distribution that has a mean of zero and a standard deviation of one, used in probability theory and statistics.

Z-score

A statistical measure representing the number of standard deviations a data point is from the mean.

Percentile

An indicator showing the value beneath which a certain percentage of data points in a collection of data lies.

Continuous Random Variables

Variables that can take on any value within a continuous range of values.

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