Once a bond rating is assigned, it:
A) Never changes over the life of the bond
B) Can change as the financial position of the issuer changes
C) Can only change if the rating change is approved by the Securities and Exchange Commission
D) Can change on the next bond from the issuer but is fixed for the current bond

Question

Quizplus · Accepted Answer

Bond ratings are not fixed and can change as the financial position of the issuer changes. Bond rating agencies regularly review and update their ratings based on the issuer's financial performance, industry trends, and other factors. A higher rating indicates lower default risk and may lower borrowing costs for the issuer, while a lower rating indicates higher risk and may result in higher borrowing costs. Therefore, it is important for investors to monitor any changes in bond ratings to help assess the creditworthiness of the issuer.

Once a Bond Rating Is Assigned, It