SIE practice questionhardBond Ratings
If an issuer’s bond rating is downgraded from A to BBB by S&P, the bond is now considered:
- ABelow investment grade
- BStill investment grade✓ Correct answer
- CTax-exempt
- DCallable
Explanation
Why B — Still investment grade
BBB is the lowest investment-grade rating. Below BBB is considered below investment grade (junk). Tax status and call features are unrelated to ratings.
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