Three Major Rating Agencies (Fitch, Moody's, and Standard and Poor's)

question 49

Multiple Choice

Three major rating agencies (Fitch, Moody's, and Standard and Poor's) for governments have each developed quantitative tools for assessing credit risk. Which of the following general factors is used by all three rating agencies in assessing credit risk?

• A) Economy.
• B) Budgetary flexibility.
• C) Revenue dispersion.
• D) Geographic location.

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Definitions:

Calendar-year

A one-year period that starts on January 1 and ends on December 31, used in financial reporting and tax calculations.

Promissory Note

A financial document representing a promise to pay a specified sum of money to the holder at a future date or upon demand.

Payee

is the party in a financial transaction who receives the payment.

Maker

In the context of finance, a maker is typically a party that creates or executes an order, often in trading or banking environments.