Question
16. The higher the credit rating given to a bond issue:
A. the higher the credit risk.
B. the higher the yield.
C. the lower the yield.
D. the higher the country risk.
A. the higher the credit risk.
B. the higher the yield.
C. the lower the yield.
D. the higher the country risk.
Answers
GPT-4o mini
C. the lower the yield.
A higher credit rating indicates a lower risk of default, which generally leads to lower yields since investors require less compensation for taking on less risk.
A higher credit rating indicates a lower risk of default, which generally leads to lower yields since investors require less compensation for taking on less risk.