Purchase Solution

Bond Ratings

Not what you're looking for?

Ask Custom Question

There is an inverse relationship between bond ratings and the required return on a bond. The required return is lowest for AAA rated bonds, and required returns increase as the ratings get lower. (worse)

a. true
b. false

Purchase this Solution

Solution Summary

This posting answers the student's question on bond ratings and gives references for the same.

Solution Preview

a. true

"Treasury notes are negotiated at higher prices than those of corporate bonds because there is a greater risk of default with bonds. That is why prices are estimated charging them with the highest discount rate (or yield-to-maturity). Then you require of a greater coupon yield (and ...

Purchase this Solution


Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Team Development Strategies

This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.

Motivation

This tests some key elements of major motivation theories.