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You Are Trying to Evaluate Two Bond Issues

question 84

Essay

You are trying to evaluate two bond issues.One bond issue is rated "A" by Moody's; the other is rated "B." How important are the bond ratings issued by Moody's Investors Service? Based on your feedback,would you purchase the "A" bond or the "B" bond?


Definitions:

Zero Inventories

An inventory management approach aimed at minimizing stock levels, often associated with Just-In-Time (JIT) manufacturing systems.

Batching Economies

The cost advantages gained by producing or processing goods in large batches, as opposed to individually or in small quantities.

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