How Is the Relationship Between a Bond's Credit Rating and Its

question 35

Multiple Choice

How is the relationship between a bond's credit rating and its interest rate best defined?

• A) Inverse relationship
• B) Direct relationship
• C) Unrelated
• D) Logarithmic

---

Definitions:

Evade Regulation

The act of avoiding compliance with laws and rules, typically through loopholes or other indirect methods, often to gain competitive advantage or reduce costs.

Vertical Relationships

Connections between companies or entities at different stages of the supply chain, such as producers and distributors.

Regulated Good

A product or service that is subject to governmental controls and restrictions.

Decrease Retailer Prices

The activity of reducing the cost at which goods or services are sold by retail outlets to the consumer market.