Agencies exist which rate bonds based on characteristics of the borrower.Such bond rating agencies are an example of a financial market response designed to:

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Bond rating agencies provide information about the creditworthiness of borrowers to potential bondholders. This information reduces information asymmetry and provides a lower cost solution than conducting research on each borrower individually. It does not decrease the real return to bondholders or transfer risk from the buyer to the rating agency.

Agencies Exist Which Rate Bonds Based on Characteristics of the Borrower.Such