The Extension of a Guarantee by Company a to Company

question 19

Multiple Choice

The extension of a guarantee by company A to company B can lower the rating of___________

• A) Company B
• B) Both A and B
• C) Guarantee has no impact on ratings of company A and company B
• D) Company A

---

Definitions:

Assets

Economic resources owned by a business or individual that are expected to bring future benefits or value.

Cost Method

An accounting method used to value inventory or investments, based on the historical cost paid for the asset.

Voting Stock

Voting stock refers to shares that give the shareholder the right to vote on company matters, such as electing the board of directors.

Debt Securities

Financial instruments representing a loan made by an investor to a borrower, typically including bonds, notes, and bills.