Based on the observed distribution of credit ratings,which of the following ranges of debt ratings is an effective rating level,meaning it cannot clearly be improved upon in terms of creating value for shareholders?

Question

Quizplus · Accepted Answer

The range of debt ratings from BBB- to A+ covers a wide range of investment-grade ratings that are considered relatively stable and safe investments. Within this range, there is a balance between risk and reward that is optimal for most investors. Moving up to ratings higher than A+ means accepting lower yields for the same level of risk, which reduces the potential for creating value for shareholders. Therefore, the effective rating level is likely to be found within this range.

Based on the Observed Distribution of Credit Ratings,which of the Following