Which Is TRUE Regarding a Rating

question 110

Multiple Choice

Which is TRUE regarding a rating?

• A) It refers only to a numerical judgment that places a person or an attribute along a continuum.
• B) It refers only to a verbal judgment that places a person or an attribute along a continuum.
• C) It tends not to involve a judgment.
• D) It refers to either a numerical or a verbal judgment that places a person or an attribute along a continuum.

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Definitions:

Common Stock

Represents ownership shares in a corporation, granting holders voting rights and a share in the company's profits via dividends.

Lease Residual

The estimated value of a leased asset at the end of the lease term, important for setting lease payments and determining buyout options.

Equity Method

An accounting technique used to record investments in other companies, where the investment is initially recorded at cost and subsequently adjusted for the investor's share of the investee's profits or losses.

Voting Common Stock

Shares that give the shareholder voting rights in a corporation's decisions, typically in proportion to the number of shares held.