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

Question

Quizplus · Accepted Answer

A bond rating upgrade from BB to BBB indicates improved credit quality, leading to a decrease in perceived risk and a likely increase in the bond's market price as demand rises.

If a Bond Rating Moves from a BB to a BBB