Which of the Following Is Likely to Be Correct for a CCC-Rated

question 52

Multiple Choice

Which of the following is likely to be correct for a CCC-rated bond,compared to a BBB-rated bond?

• A) The CCC bond will sell for a higher price.
• B) The CCC bond will sell for a lower price.
• C) The CCC bond will offer a higher promised yield to maturity.
• D) The CCC bond will offer a lower promised yield to maturity.

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Definitions:

Capital

Financial assets or the financial value of assets, such as cash and securities, owned by a business or individual, used for creating wealth or to engage in further production.

Revenue

The total amount of money earned by a business from its normal business operations, before any expenses are subtracted.

Credit Balance

An accounting situation where the sum of credits in an account exceeds the sum of debits, often seen in liability and revenue accounts.

Income Summary

An account used in the closing process that aggregates all revenues and expenses to determine the overall profit or loss.