What Type of Risk Is Assessed by Credit Rating Agencies

question 26

Essay

What type of risk is assessed by credit rating agencies? Do these agencies generally assign individuals or teams to assess a firm's risk? What are some of the ways the rating agencies are paid for their services?

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Definitions:

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices during a specific time period.

Productivity

Refers to the efficiency of production in terms of units produced per unit of input, such as labor or capital.

Resource

A resource is any physical or virtual entity of limited availability that needs to be consumed to obtain a benefit.

Productivity

The effectiveness in producing outcomes or results; can refer to the rate at which work is completed or the efficiency of resource use.