Explain the Rating System Used by Morningstar

question 32

Essay

Explain the rating system used by Morningstar.

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Definitions:

User Cost

The cost associated with the use of a product or service, including depreciation, maintenance, and opportunity cost of using the asset over time.

Extracting

The process of removing a resource from the earth, often relating to natural resources like minerals, oil, or gas.

Conservation Cost

The expenses associated with the actions taken to preserve natural resources or to minimize environmental impact.

Nonrenewable Resource

A natural resource that cannot be replenished or regenerated at the same rate at which it is consumed, such as oil, natural gas, and minerals.