Bond rating agencies are important in the channeling of funds to __________ firms in __________-oriented systems.
A) small; banking
B) small; markets
C) large; banking
D) large; markets

Question

Quizplus · Accepted Answer

Bond rating agencies play a crucial role in directing funds to large firms in market-oriented systems. Market-oriented systems rely heavily on capital markets as a source of funding for large businesses, and bond rating agencies evaluate the creditworthiness of these firms, which affects the cost of capital and the availability of funds. In contrast, small firms in banking-oriented systems may have more difficulty obtaining financing and may rely more heavily on relationship-based lending from banks.

Bond Rating Agencies Are Important in the Channeling of Funds