Generally with bond ratings,the ________ the rating,the lower the interest rate an investor will receive and the ________ the risk that the issuer of the bond will default.

Question

Quizplus · Accepted Answer

A higher bond rating indicates a lower risk of default, which means investors are willing to accept a lower interest rate. A lower bond rating indicates a higher risk of default, which means investors will demand a higher interest rate to compensate for the increased risk.

Generally with Bond Ratings,the ________ the Rating,the Lower the Interest