Moody's and Standard and Poor's Are Agencies That

question 75

Multiple Choice

Moody's and Standard and Poor's are agencies that

• A) help investors collect when corporations default on their bonds.
• B) advise municipal bond issuers on the tax exempt status of their bonds.
• C) produce information about the probability of default on corporate bonds.
• D) maintain liquid markets for corporate bonds.

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Definitions:

Outside Supplier

A third-party entity that provides goods or services to a business.

Residual Income

Income that remains after all operating expenses, including cost of capital, are subtracted from revenue, often used in performance measurement.

Investment Center

A business segment whose manager has control over cost, revenue, and investments in operating assets.

Cost Center

A department or segment of a business to which costs can be allocated but does not directly generate revenue.