As the rating of a bond increases (for example,from A,to AA,to AAA),it generally means that ________.

Question

Quizplus · Accepted Answer

As the credit rating of a bond increases, it indicates that the issuer has a lower probability of default, and hence the default risk decreases. This leads to a lower required rate of return, as investors are more confident in the ability of the issuer to repay its debt. Therefore, Choice C is the correct answer.

As the Rating of a Bond Increases (For Example,from A,to