Which of the following statements is not true regarding bond ratings? Select one: C a. The ratings assigned are meant to indicate the probability of default for the bond issuer. b. The bonds assigned one of the top four rating classes are considered investment grade bonds. C. Once a rating is assigned to an issue it cannot be changed for the first two years after which it is reviewed on a regular basis. d. Bonds rated BB and below are referred to as high yield or "junk" bonds.
Which of the following statements is not true regarding bond ratings? Select one: C a. The ratings assigned are meant to indicate the probability of default for the bond issuer. b. The bonds assigned one of the top four rating classes are considered investment grade bonds. C. Once a rating is assigned to an issue it cannot be changed for the first two years after which it is reviewed on a regular basis. d. Bonds rated BB and below are referred to as high yield or "junk" bonds.
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter11: Bond Pricing And Amortization (bonds)
Section: Chapter Questions
Problem 3R
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Question
![Which of the following statements is not true regarding bond ratings?
Select one:
C
a.
The ratings assigned are meant to indicate the probability of default for the bond
issuer.
b.
The bonds assigned one of the top four rating classes are considered investment
grade bonds.
C.
Once a rating is assigned to an issue it cannot be changed for the first two years after
which it is reviewed on a regular basis.
d.
Bonds rated BB and below are referred to as high yield or "junk" bonds.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F55521067-0384-497f-95f8-f51a06d5dbdf%2F0b76d6a1-9296-4119-9ef9-9b181b1389c1%2Firmaszk_processed.png&w=3840&q=75)
Transcribed Image Text:Which of the following statements is not true regarding bond ratings?
Select one:
C
a.
The ratings assigned are meant to indicate the probability of default for the bond
issuer.
b.
The bonds assigned one of the top four rating classes are considered investment
grade bonds.
C.
Once a rating is assigned to an issue it cannot be changed for the first two years after
which it is reviewed on a regular basis.
d.
Bonds rated BB and below are referred to as high yield or "junk" bonds.
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