There Is an Inverse Relationship Between Bond Ratings and the Required

question 77

True/False

There is an inverse relationship between bond ratings and the required return on a bond. The required return is lowest for AAA rated bonds, and required returns increase as the ratings get lower (worse). 

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Definitions:

Delicatessen

A store or section of a grocery store selling cured meats, cheese, and other specialty food items.

Inelastic Demand

A situation where the demand for a product does not change significantly with a change in its price.

Gasoline

A volatile, flammable liquid derived from petroleum, used primarily as fuel in internal combustion engines.

Sushi

A traditional Japanese dish consisting of vinegared rice, usually accompanied by various ingredients like seafood, vegetables, and occasionally tropical fruits.