If a Bond Rating Moves from a BB to a BBB

question 116

Multiple Choice

If a bond rating moves from a BB to a BBB rating

• A)the bond will still be classified as junk.
• B)it must also move from a Ba to a Baa rating.
• C)the market yield on the bond will rise.
• D)the market price of the bond will rise.

---

Definitions:

Direct Labor-Hours

The total hours worked by employees who are directly involved in the production process, used for calculating labor costs and efficiency.

Plantwide Predetermined Overhead

An overhead rate calculated for an entire manufacturing plant, applied to all products regardless of the specific department in which they were produced.

Machine-Hours

A measure of production activity that quantifies the number of hours machines are operated in the manufacturing process.

Mark Up

The percentage added to the cost price of goods to cover overhead and profit.