Selling lower-rated issues and then purchasing higher-rated securities is considered a/an
A)amortization of intangible assets.
B)purchasing power gains.
C)flight to quality.
D)quality smoothing.

Question

Quizplus · Accepted Answer

Selling lower-rated securities and purchasing higher-rated securities is known as a "flight to quality." Investors may do this in times of market uncertainty or when there is a perceived increase in risk. By buying higher-rated securities, they hope to reduce their overall risk and exposure to market volatility.

Selling Lower-Rated Issues and Then Purchasing Higher-Rated Securities Is Considered