SIE practice questionhardBond ratings
A bond with a 'C' rating is considered:
- AInvestment grade
- BSpeculative or junk✓ Correct answer
- CTax-exempt
- DBacked by the U.S. government
Explanation
Why B — Speculative or junk
'C' ratings indicate junk or speculative grade – very high risk. Investment grade is BBB/Baa or higher; tax status and U.S. backing are unrelated to credit rating.
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
- All of the following are advantages of U.S. Treasury bonds EXCEPT:
- Which statement is TRUE about STRIPS?
- Which of the following statements best describes a feature of corporate bonds compared to government bonds?
- As coupon rates decrease and maturity increases, what happens to duration?
- A city issues a bond backed by the full faith and credit of the municipality. What type of bond is this?
- A support (companion) tranche in a CMO is MOST exposed to:
- Which U.S. Treasury security is issued at a discount and does not pay periodic interest, but matures at face value?
- A callable bond purchased at a premium is called at the first opportunity. What effect does this have on the investor’s…