Which One of the Following Statements Concerning Bond Ratings Is

question 70

Multiple Choice

Which one of the following statements concerning bond ratings is correct?

• A) Investment grade bonds are rated BB or higher by Standard & Poor's.
• B) Bond ratings assess both interest rate risk and default risk.
• C) Split-rated bonds are called crossover bonds.
• D) The highest rating issued by Moody's is AAA.
• E) A "fallen angel" is a term applied to all "junk" bonds.

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Definitions:

Cost Recovery Method

A revenue recognition approach where no profit is recognized until all the costs of the goods sold have been recovered from revenues.

Merchandise Sold

The goods that have been sold by a company, typically referring to products sold rather than services rendered.

Gross Profit

The difference between the revenue generated from sales and the cost of goods sold, before accounting for operating expenses, interest, and taxes.

Billings

Billings refer to the total amount of revenue recognized by a company before deducting expenses, often in the context of a professional firm.