What is the highest rating a bond can have?

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BlackTom AI · Accepted Answer

The question presented asks: What is the highest rating a bond can have?

Since this is a short-answer format, there are no answer options to evaluate, so we’ll focus on the concept itself.

Bond credit ratings are issued by rating agencies to indicate the creditworthiness of the issuer and the likelihood of timely principal and interest payments. In most major rating scales, the top tier represents the best credit quality and the lowest perceived default risk.

From one of the well-known scales, the highest rating is AAA, reflecting extremely strong capacity to meet financial commitments. A closely related pinnacle label exists in other agencies’ scales, such as Aaa from Moody’s, which serves the same purpose on their scale. While the exact letter and formatting differ between agencies, the intent is the same: a bond rated at the highest level signals minimal credit risk.

In practice, a bond rated AAA (or Aaa) is considered to have the strongest credit quality among publicly rated bonds, with the issuer judged to have very low risk of default relative to other ratings. Ratings below this top tier indicate progressively greater credit risk and higher yield to compensate investors for that risk.

Note that some markets also use alternative notations or additional qualifiers (like 'AAA with a stable outlook' or 'AAA with a negative outlook'), but the core idea remains that AAA is the highest designation.

In the context of your provided data, the answer field contains AAA as the stated correct response, aligning with this standard interpretation of the最高等级 credit rating.

BUSFIN 4236 SP2025 (5326) Capital Markets - FINAL EXAM- Requires Respondus LockDown Browser

What is the highest rating a bond can have?

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A(n) corporate bond will pay a return.

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Rank these bonds in order from most secure (investment grade) to least secure (non-investment grade/ junk) based on ratings from Standard & Poor's (S&P): Tesla Bond (BB+) 4 Government of Canada Bond (AAA) [ Select ] 2 4 1 3 Netflix Bond (BBB) [ Select ] 4 3 2 1 Walmart Bond (AA) 2

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BUSFIN 4236 SP2025 (5326) Capital Markets - FINAL EXAM- Requires Respondus LockDown Browser

What is the highest rating a bond can have?

View Explanation

Log in for full answers

Similar Questions

A(n) ________ corporate bond will pay a ________ return.

What is the bond rating cutoff for a bond to be classified as a junk bond?

Bonds with relatively low risk of default are called ________ securities and have a rating of Baa (or BBB) and above; bonds with ratings below Baa (or BBB) have a higher default risk and are called ________.

Rank these bonds in order from most secure (investment grade) to least secure (non-investment grade/ junk) based on ratings from Standard & Poor's (S&P): Tesla Bond (BB+) 4 Government of Canada Bond (AAA) [ Select ] 2 4 1 3 Netflix Bond (BBB) [ Select ] 4 3 2 1 Walmart Bond (AA) 2

Bonds with AAA rating generally offer lower yields than bonds with BB rating

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Bonds rated below Baa by Moody's or BBB by S&P are junk bonds.

In a consumer society, many adults channel creativity into buying things

More Practical Tools for Students Powered by AI Study Helper

Making Your Study Simpler

A(n) corporate bond will pay a return.

Bonds with relatively low risk of default are called securities and have a rating of Baa (or BBB) and above; bonds with ratings below Baa (or BBB) have a higher default risk and are called .