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Author Question: If a bond rating moves from a BB to a BBB rating and investors did not anticipate this rating change (Read 148 times)

BSITTON

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Question 1

Bonds with one of the top four ratings (Aaa through Baa, or AAA through BBB) are designated as
◦ split bonds.
◦ investment grade bonds.
◦ illiquid bonds.
◦ high-yield bonds.

Question 2

If a bond rating moves from a BB to a BBB rating and investors did not anticipate this rating change
◦ the bond will still be classified as junk.
◦ it must also move from a Ba to a Baa rating.
◦ the market yield on the bond will rise.
◦ the market price of the bond will rise.


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Marked as best answer by BSITTON on Mar 29, 2022

ALuthy

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BSITTON

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Reply 2 on: Mar 29, 2022
:D TYSM


gcook

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

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