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26. According to the Standard & Poor’s Investor Services ratings, which of these ratings indicate a...

26. According to the Standard & Poor’s Investor Services ratings, which of these ratings indicate a highly speculative and risky bond?

  1. AA
  2. B
  3. CCC
  4. BBB
  5. XYZ
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Answer #1

The correct answer is option 2

Explanation:- B bonds are also referred to as junk bonds and they offer very less protection against default which is the reason they are considred as highly speculative and risky bonds. These bonds are able to make their principal and interest payments but the risk of default is high.

According to S&P Investor Services ratings, AA is considered as high grade investment bonds and BBB is considered as medium grade investment bonds. CCC is considered as poor quality bonds

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