The Existence of Rating Agencies Has

question 57

Multiple Choice

The existence of rating agencies has

• A)lowered returns on corporate bonds.
• B)raised returns on corporate bonds.
• C)left returns on corporate bonds largely unaffected.
• D)raised returns on both corporate bonds and Treasury securities.

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Definitions:

Understated

A term used when financial records show a figure to be less than the actual amount, indicating a discrepancy or error.

Asset Account

Accounts that represent the different types of resources owned by a business, which have economic value and can provide future benefits.

Liability Account

records and tracks obligations or debts that a company owes to others, such as loans, mortgages, accounts payable, and other financial liabilities.

Overstated

A term used when the value of an asset or income is recorded higher than it actually is, leading to inaccuracies in financial reporting.