Credit ratings provided by Moody's and Standard & Poor's are highly reliable indicators of a firm's degree of financial distress.

Question

Quizplus · Accepted Answer

Credit ratings from Moody's and Standard & Poor's provide an assessment of credit risk but are not infallible predictors of financial distress. They are based on available information and subjective judgments, and there have been instances where firms experienced financial distress or defaulted despite having high credit ratings.

Credit Ratings Provided by Moody's and Standard & Poor's Are