Which of the Following Is NOT a Reason That Credit

question 55

Multiple Choice

Which of the following is NOT a reason that credit ratings agencies became more relevant beginning in the late 1970s?

• A)the number of bond defaults rose due to periods of recession and inflation
• B)rating agencies began to charge investors for their services
• C)governments began to include bond ratings in their regulation of banks, mutual funds, and other financial firms
• D)rating agencies began to rate bonds issued by foreign governments and firms

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Definitions:

Dependent Events

Events whose probability of occurring is influenced by the occurrence of another event.

Mutually Exclusive

Refers to a situation where the occurrence of one event means the other cannot occur.

Independent

A term in statistics that describes two or more events that do not affect each other's outcomes.

Multiplicative Rule

In probability, a rule that calculates the probability of two independent events occurring together by multiplying the probability of each event.