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A Bond with Which of the Following Credit Ratings Would

question 24

Multiple Choice

A bond with which of the following credit ratings would be considered investment grade? I. AA
II. A
III. BBB
IV. BB


Definitions:

Default

The failure to meet the legal obligations or conditions of a loan or other financial agreement, such as not making scheduled payments.

Credit Customer

An individual or entity that purchases goods or services on credit, with an agreement to pay at a later date.

Discount Rate

The interest rate used to discount future cash flows to their present value, often used in the calculation of net present value.

Terms of Sale

Conditions agreed upon by the buyer and seller regarding the delivery, payment, and other aspects of a transaction for goods or services.

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