There Is an Inverse Relationship Between Bond Ratings and the Required

question 77

True/False

There is an inverse relationship between bond ratings and the required return on a bond. The required return is lowest for AAA rated bonds, and required returns increase as the ratings get lower (worse). 

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Definitions:

Dominant Strategy

In game theory, a strategy that is the best for a player to follow regardless of the strategies chosen by other players in the game.

Wealth

The accumulation of valuable financial assets or tangible possessions that can be used or exchanged to procure goods and services.

Contribute

To give or donate something, such as resources, ideas, or money, towards a common goal or project.

Benefit

An advantage, profit, or gain received from something.