Bond rating services:
A)evaluate credit or default risk.
B)can affect bond prices by the ratings they give.
C)classify Government of Canada bonds as nearly default risk free.
D)all of the above

Question

Quizplus · Accepted Answer

Bond rating services evaluate credit or default risk, and the ratings they give can affect bond prices. For example, if a bond is given a lower rating, investors may see it as riskier and demand a higher yield to compensate. Bond rating services also classify Government of Canada bonds as nearly default risk free, which affects investor perception and demand for these bonds.

Bond Rating Services