The higher the credit rating given to a bond issue:

Question

Quizplus · Accepted Answer

The higher the credit rating given to a bond issue, the lower the risk of default by the issuer, which means that investors are willing to accept a lower yield. Therefore, the correct choice is C. Choices A and D are incorrect because a higher credit rating indicates a lower credit risk and a lower country risk, respectively. Choice B is incorrect because a higher yield would suggest that the bond issuer is a riskier investment, which is not the case with a higher credit rating.

The Higher the Credit Rating Given to a Bond Issue