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Which one of these statements regarding corporate bond credit ratings is correct? Multiple Choice Bonds rated Ba3 or above by Moody's are considered investment-grade bonds
Which one of these statements regarding corporate bond credit ratings is correct?
Multiple Choice
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Bonds rated Ba3 or above by Moody's are considered investment-grade bonds.
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All bonds issued by the same issuer will have the same credit rating.
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A bond's credit spread may be a better indicator of a bond's risk than its rating.
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Bond ratings are based solely on the seniority of the bond issue and the protective covenants by which it is covered.
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Credit ratings are assigned to the bond issuer, not the bond issue.
Expert Solution
All are incorrect except the statement 3.
A bond's credit spread may be a better indicator of a bond's risk than its rating.
Answer = Option 3
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