Which of the Following Statements Is False

question 32

Multiple Choice

Which of the following statements is false?

• A) Bond ratings encourage widespread investor participation and relatively liquid markets.
• B) Bonds in the top four categories are often referred to as investment grade bonds.
• C) A bond's rating depends on the risk of bankruptcy as well as the bondholder's ability to lay claim to the firm's assets in the event of a bankruptcy.
• D) Debt issues with a low-priority claim in bankruptcy will have a better rating than issues from the same company that have a higher priority in bankruptcy.