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You Are Trying to Evaluate Two Bond Issues

question 20

Essay

You are trying to evaluate two bond issues. One bond issue is rated "A" by the DBRS; the other is rated "B." How important are the bond ratings issued by the DBRS and CBRS? Based on your answer, would you purchase the "A" bond or the "B" bond?


Definitions:

Total Return

The overall financial gain or loss on an investment, including both the change in value and any income from dividends or interest, over a specific period.

Probability

A measure of the likelihood of an event occurring, often expressed as a number between 0 and 1.

Probability

Probability is a branch of mathematics that measures the likelihood of a given event's occurrence, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

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