SIE practice questioneasyBond ratings
A bond rated 'BBB' by Standard & Poor's is considered:
- AInvestment grade✓ Correct answer
- BBelow investment grade
- CSpeculative grade
- DDefaulted
Explanation
Why A — Investment grade
A 'BBB' rating is the lowest investment grade rating by S&P. Bonds rated 'BB' or below are considered speculative (junk). Defaulted bonds are those in payment default.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Debt Securities questions
- An investor buys a $1,000 par 6% corporate bond at par. What is the current yield?
- Which U.S. Treasury security is always issued at a discount and matures in one year or less?
- Which of the following is an example of a U.S. government agency bond?
- Which municipal bond is primarily backed by the taxing power of the issuer?
- Which characteristic applies to a zero-coupon bond?
- A corporation issues a 10-year bond with a 5% coupon, payable semiannually. Which of the following best describes this…
- A convertible bond allows the holder to:
- A 20-year 6% bond is callable in 10 years at 105 and is trading at 108. Which yield is the lowest?