Bond ratings measure a bond's credit risk.

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Bond ratings are a measure of a bond's credit risk, reflecting the likelihood of the issuer defaulting on the bond's payments. Higher-rated bonds have lower credit risk and are considered safer investments, while lower-rated bonds have higher credit risk and offer higher potential returns but also a greater chance of default. Bond rating agencies such as Standard & Poor's, Moody's, and Fitch assign letter grades to indicate the creditworthiness of bonds.

Bond Ratings Measure a Bond's Credit Risk