Investment grade bonds are rated by Standard and Poor's (Moody's) with which of the following designations?

Investment grade bonds are rated by Standard and Poor's (Moody's) with which of the following designations?

• A. AAA (Aaa)
• B. AA (Aa) or higher
• C. BBB (Baa) or higher
• D. BB (Ba) or higher

Answer: (C)

Investment grade bonds are classified as those that have a credit rating of BBB (Baa) or higher by Standard and Poor's and Moody's, respectively. This rating signifies that these bonds are considered to have a relatively low risk of default and are more likely to meet their financial obligations. Bonds rated BBB/Baa or higher are suitable for conservative investors seeking stable income with an acceptable level of risk. Ratings below this threshold, such as BB (Ba), are classified as non-investment grade and carry a higher risk of default, making them less attractive to risk-averse investors. Overall, the classification system helps investors make informed decisions based on the creditworthiness of the issuers and the associated risks.

Investment grade bonds are classified as those that have a credit rating of BBB (Baa) or higher by Standard and Poor's and Moody's, respectively. This rating signifies that these bonds are considered to have a relatively low risk of default and are more likely to meet their financial obligations.

Bonds rated BBB/Baa or higher are suitable for conservative investors seeking stable income with an acceptable level of risk. Ratings below this threshold, such as BB (Ba), are classified as non-investment grade and carry a higher risk of default, making them less attractive to risk-averse investors.

Overall, the classification system helps investors make informed decisions based on the creditworthiness of the issuers and the associated risks.