36. (0.2 point) An example of an investment grade corporate bond would be one rated (a)...

36. (0.2 point)
An example of an investment grade corporate bond would be one rated

(a) B.

(b) D.

(d) BB.

37. (0.2 point)
Among similar corporate bonds, the one with the highest market price would be the one with a rating of

(a) A.

(b) CCC.

(d) BBB.

38. (0.2 point)
The major factor resulting in a decrease in a bond's rating is
(a) decrease in marketability.

(b) increase in default risk.
(c) the call provision.

(d) an increase in its coupon rate.

Solutions

Expert Solution

36. BBB

BBB is the minimum investment grade rating for an investment grade corporate bond. Hence the bond must be rated at least BBB Or higher to qualify investment grade.

37 A

Higher the rating of a bond higher is the credibility and hence price is relatively more.

38 increase in default risk.

Higher the chances of default by a particular bond the lower the rating that is assigned to it

jeff jeffy answered 2 years ago

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