How is the relationship between a bond's credit rating and its interest rate best defined?

Question

Quizplus · Accepted Answer

There is an inverse relationship between a bond's credit rating and its interest rate. A lower credit rating indicates a higher risk of default, so investors demand a higher interest rate to compensate for the risk. Conversely, a higher credit rating indicates a lower risk of default, so investors are willing to accept a lower interest rate.

How Is the Relationship Between a Bond's Credit Rating and Its