According to bond rating agencies,a bond rated "AAA" has a higher probability of default than a bond with a "BBB" rating.

Question

Quizplus · Accepted Answer

This statement is false. Bond rating agencies assign higher ratings (e.g. AAA, AA) to bonds with lower probabilities of default, and lower ratings (e.g. BBB, BB) to bonds with higher probabilities of default. Therefore, a bond rated AAA will have a lower probability of default than a bond rated BBB.

According to Bond Rating Agencies,a Bond Rated "AAA" Has a Higher