What is the minimum rating required for a bond to be considered investment grade? Question 10...
What is the minimum rating required for a bond to be considered investment grade?
Question 10 options:
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AA |
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A |
|
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BB |
|
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BBB |
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None of the above. |
Homework Answers
Minimum investment grade for a bond is BBB and any bonds rated BBB or above is considered to be having less default and hence lower risks. As these bonds come with lower risks,their expected returns (ie YTM) is also lower.
Answer is BBB
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What is the minimum rating required for a bond to be considered
investment grade?
Question 10...
What is the minimum rating required for a bond to be considered investment grade? AA OA...
What is the minimum rating required for a bond to be considered investment grade? AA OA BB BBB None of the above.
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The highest S&P bond rating category considered to be of junk quality grade is: в А. ААА B. BBB- C. BB+ D.CCC+ E. None of the above In contrast to System 1 thinking, System 2 thinking is focused on intuition, feelings, and unconscious thought. True False
10. Bond ratings Aa Aa Rating agencies-such as Standard & Poor's (S&P), Moody's Investor Service, and...
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1. What are considered investment-grade bond ratings according to Moody's and Standard & Poor's? ( 10...
1. What are considered investment-grade bond ratings according to Moody's and Standard & Poor's? ( 10 points )
Question 8 1 pts If a bond has a Standard & Poor's rating of a BB...
Question 8 1 pts If a bond has a Standard & Poor's rating of a BB or below, it is referred to as a investment-grade bond. zero-coupon bond. municipal bond. junk bond.
What is the lowest grade of the investment grade bonds? AAA BBB B С D None...
What is the lowest grade of the investment grade bonds? AAA BBB B С D None of the above
A firm with an AA-rating plans to issue one million units of a 10 year-4% bond...
A firm with an AA-rating plans to issue one million units of a 10 year-4% bond with face value $100. After the financial crisis this firm is downgraded to a B-rating. The yield curve increases 0.2% per year. The yield for year 1 is yı=1%, for year 2 is y2=1.2%, y3=1.4% and so on and y10=2.8%. The default spreads are given in the table below. (a) What is the initial amount (before downgrading) the firm wants to raise? [2p] How...
HMK Enterprises would like to raise $10 million to invest in capital expenditures. The company plans...
HMK Enterprises would like to raise $10 million to invest in
capital expenditures. The company plans to issue 5-year bonds with
a face value of $1,000 and a coupon rate of 6.52% (annual
payments). The following table summarizes the yield to maturity for
5-year (annual-payment) coupon corporate bonds of various
ratings:
a. Assuming the bonds will be rated AA, what will be the price
of the bonds? (5 marks)
a. $856.32
b. $987.45
c. $999.66
d. $1,008.77
e. $1,019.88
b....
5. Why are bond ratings important? A. A bond rating is an indicator of its default...
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What are the ratings of investment grade bonds, and at what rating does 'junk' begin? What...
What are the ratings of investment grade bonds, and at what rating does 'junk' begin? What factors separate the two types of bonds? Which type of bond do you think will pay higher interest?
What is the minimum rating required for a bond to be considered investment grade? AA OA BB BBB None of the above.
The highest S&P bond rating category considered to be of junk quality grade is: в А. ААА B. BBB- C. BB+ D.CCC+ E. None of the above In contrast to System 1 thinking, System 2 thinking is focused on intuition, feelings, and unconscious thought. True False
10. Bond ratings Aa Aa Rating agencies-such as Standard & Poor's (S&P), Moody's Investor Service, and Fitch Ratings-assign credit ratings to bonds based on both quantitative and qualitative factors. These ratings are considered indicators of the issuer's default risk, which impacts the bond's interest rate and the issuer's cost of debt capital. Based on these ratings, bonds are classified into investment-grade bonds and junk bonds. Which of the following bonds is likely to be classified as a junk bond? OA...
Question 8 1 pts If a bond has a Standard & Poor's rating of a BB or below, it is referred to as a investment-grade bond. zero-coupon bond. municipal bond. junk bond.
What is the lowest grade of the investment grade bonds? AAA BBB B С D None of the above
A firm with an AA-rating plans to issue one million units of a 10 year-4% bond with face value $100. After the financial crisis this firm is downgraded to a B-rating. The yield curve increases 0.2% per year. The yield for year 1 is yı=1%, for year 2 is y2=1.2%, y3=1.4% and so on and y10=2.8%. The default spreads are given in the table below. (a) What is the initial amount (before downgrading) the firm wants to raise? [2p] How...
HMK Enterprises would like to raise $10 million to invest in
capital expenditures. The company plans to issue 5-year bonds with
a face value of $1,000 and a coupon rate of 6.52% (annual
payments). The following table summarizes the yield to maturity for
5-year (annual-payment) coupon corporate bonds of various
ratings:
a. Assuming the bonds will be rated AA, what will be the price
of the bonds? (5 marks)
a. $856.32
b. $987.45
c. $999.66
d. $1,008.77
e. $1,019.88
b....
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