Which of the following ratings indicate that a bond is low quality?
I.Baa
II.BB
III.B
IV.Ba

Question

Quizplus · Accepted Answer

The rating system used by rating agencies such as S&P and Moody's classify bonds on a scale from AAA to C (or D). Bonds rated below BBB- by S&P or Baa3 by Moody's are considered to be low quality/high risk, and are often referred to as "junk bonds." 
Therefore, II (BB), III (B), and IV (Ba) all fall below the BBB-/Baa3 threshold and are considered low quality bonds. Choice A is incorrect because Baa is an investment-grade rating, while choice D and E are too broad and include investment-grade ratings as well.

Which of the Following Ratings Indicate That a Bond Is