Why Do Ratings Agencies Rate Bonds

question 268

Multiple Choice

Why do ratings agencies rate bonds?

• A) to indicate the chance of a bond being repaid
• B) to show a bond's probable rate of return
• C) to validate the amount of collateral involved
• D) to verify the cost of the bond

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Definitions:

Production Manager

A professional responsible for overseeing the production process in a manufacturing facility, ensuring that goods are produced efficiently, on time, and within budget.

Production Line

A manufacturing process in which parts or ingredients are added in sequence until the final product is assembled.

Kaoru Ishikawa

A prominent Japanese organizational theorist known for his contributions to quality management, including the development of the Ishikawa or fishbone diagram.

Fishbone Diagram

A visual tool used for identifying the root causes of a problem, named for its resemblance to a fish's skeleton.