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Author Question: Which of the following is NOT an action or consequence of the activities of bond rating agencies? (Read 52 times)

haydenjmcm

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Question 1

Which of the following is considered the dominant law when a firm with liabilities exceeding $5 million is declaring bankruptcy?

Companies’ Creditors Arrangements Act


Bankruptcy and Insolvency Act


Federal Bankruptcy Code


International Financial Reporting Standards



Question 2

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

In assessing the rating, the agency examines both qualitative and quantitative factors.


When a material change is identified in any of the factors used to measure a bond’s default risk the agency will not adjust immediately to changes in credit quality, and in some cases there can be a considerable lag between a change in credit quality and a change in rating.


With respect to qualitative factors, the agency will pay particular attention to important provisions, including whether the bond is secured by a mortgage on specific assets, whether the bond is subordinated to other debt, or any sinking fund provisions. 


Rating agencies review outstanding bonds on a periodic basis and re-rate if necessary.



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Marked as best answer by haydenjmcm on Aug 7, 2023

Harsh06

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haydenjmcm

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Reply 2 on: Aug 7, 2023
Excellent


bblaney

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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