Which of the Following Statements About Credit Ratings Is Most

question 45

Multiple Choice

Which of the following statements about credit ratings is most accurate?

• A) Credit ratings can migrate over time.
• B) Changes in bond credit ratings precede changes in bond prices.
• C) Credit ratings are focused on expected loss rather than risk of default.

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Definitions:

Sales

The transactions involving the exchange of goods or services for money, reflecting a key revenue source for businesses.

Beginning Inventory

The financial value of stock ready for market at the beginning of a bookkeeping period.

Average Inventory

An estimation of the value of inventory over a certain time period, typically calculated by averaging the inventory levels at the beginning and end of the period.

Ending Inventory

The cumulative value of goods prepared for sale by the end of a bookkeeping period.