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Questions and Answers
What is the primary purpose of a credit rating?
What is the primary purpose of a credit rating?
- To communicate the creditworthiness of the issuer through symbols
- To provide investment recommendations
- To evaluate the issuer's ability to repay loans (correct)
- To assess the financial strength of the borrower
What is the typical range of an individual's credit score?
What is the typical range of an individual's credit score?
- 200 to 800
- 300 to 900 (correct)
- 400 to 1000
- 100 to 900
Which of the following is NOT a characteristic of credit rating mentioned in the text?
Which of the following is NOT a characteristic of credit rating mentioned in the text?
- Provides a specific investment recommendation (correct)
- Conducted by experts
- Evaluation of the issuer's ability to repay
- Data-driven assessment
What does a high credit rating imply about the borrower?
What does a high credit rating imply about the borrower?
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What is the significance of debt instruments rated below BB?
What is the significance of debt instruments rated below BB?
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What is the main difference between credit ratings and credit scores?
What is the main difference between credit ratings and credit scores?
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What is the primary purpose of a credit rating?
What is the primary purpose of a credit rating?
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Which entities typically assign credit ratings?
Which entities typically assign credit ratings?
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How are credit rating agencies compensated for their services?
How are credit rating agencies compensated for their services?
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What does a higher credit rating generally indicate?
What does a higher credit rating generally indicate?
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Which of the following factors are typically considered when assigning a credit rating?
Which of the following factors are typically considered when assigning a credit rating?
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What is the primary purpose of credit ratings in the world of finance?
What is the primary purpose of credit ratings in the world of finance?
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