Which of the Following Is NOT an Action or Consequence

question 69

Multiple Choice

Which of the following is NOT an action or consequence of the activities of bond rating agencies?

• A)In assessing the rating, the agency examines financial ratios, contract terms (restrictive covenants), and important qualitative factors.
• B)When a material change is identified in any of the factors used to measure a bond's default risk, the agency will immediately announce a change in the rating.
• C)With respect to qualitative factors, the agency will pay particular attention to ratios, measuring return on assets, interest coverage, and operating profit margins.
• D)While it is the mandate of the agency to report on the creditworthiness of securities held by bondholders, their findings are also relevant to the firm's shareholders.

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Definitions:

Interpersonal Contacts

Relationships or interactions between individuals, involving communication and exchange of ideas, emotions, or information.

Adaptive Organizations

Companies or entities that are able to adjust and evolve in response to changes in their environment or industry.

Narrow Spans of Control

An organizational structure where a manager has a limited number of direct reports, allowing closer supervision and interaction.

Initiative

The ability to assess and initiate actions independently, often leading to innovation or problem-solving.