Which of the following would be most likely to earn an AAA rating from Standard & Poor's?
A) A 10-year bond issued by Canada
B) A bond issue by a new vegetarian fast-food chain
C) A 10-year bond issued by a state or municipality
D) Shares of stock in Coca-Cola

Question

Quizplus · Accepted Answer

A 10-year bond issued by Canada is most likely to earn an AAA rating from Standard & Poor's as Canada has a stable economy and government, making it a low-risk investment. Bonds issued by state or municipalities may also be considered relatively safe, but the rating would depend on the specific financial situation of the issuer. The stock of a company such as Coca-Cola has more volatility and risk compared to bonds and is therefore unlikely to earn an AAA rating. A new vegetarian fast-food chain may not have an established track record and may be considered high-risk, making it unlikely to earn an AAA rating.

Which of the Following Would Be Most Likely to Earn