A conservative investor would buy bonds that receive which of the foll

QUESTION

A conservative investor would buy bonds that receive which of the following Standard & Poor’s rating?

A) AA
B) BBB
C) B
D) CCC
E) C

ANSWER

Answer: A
Explanation: A) Bond ratings measure the quality and safety of a bond. The AA rating is Standard & Poor’s second highest rating: high quality. Conservative investors want to avoid risk and would purchase these bonds over the lower rated bonds.