To evaluate the risk and quality of an individual bond issue, savvy investors rely heavily on:
A) Bond ratings provided by financial investment services such as Moody's.
B) Newspaper articles.
C) Bond interest payments.
D) The company's audit report.

Question

Quizplus · Accepted Answer

Bond ratings provided by financial investment services such as Moody's are considered a reliable measure of the risk and quality of an individual bond issue. These ratings are based on an evaluation of the issuer's creditworthiness and ability to meet its debt obligations. Additionally, ratings agencies such as Moody's are independent and provide unbiased assessments of bond issues, making them a reliable source for investors to evaluate their investment risk.

To Evaluate the Risk and Quality of an Individual Bond