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How would you describe the relationship between a bond's credit rating and its interest rate? Multiple...

How would you describe the relationship between a bond's credit rating and its interest rate?

Multiple Choice

  • Inverse relationship

  • Unrelated

  • Logarithmic

  • Direct relationship

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Answer #1

  

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How would you describe the relationship between a bond's credit rating and its interest rate Inverse relationship.

When ratings are low, the risk is high and investor demand higher interest in market and vice - versa.

option 1 is correct.

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