Which of the Following Statements Is Not True Regarding Bond

question 12

Multiple Choice

Which of the following statements is not true regarding bond ratings?

• A) The ratings assigned are meant to indicate the probability of default for the bond issuer.
• B) The bonds assigned one of the top four rating classes are considered investment grade bonds.
• C) Once a rating is assigned to an issue it cannot be changed for the first two years after which it is reviewed on a regular basis.
• D) Bonds rated BB and below are referred to as high yield or "junk" bonds.
• E) The rating agencies modify the ratings with + and - signs or numbers after the letters.

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