An analyst is evaluating the potential downgrade of a bond by Standard & Poor's, which could result in it becoming non-investment grade. The current rating of this bond is most likely: | Chartered Financial Analyst Level 1 Quiz - LeetQuiz
Chartered Financial Analyst Level 1
Explanation:
Explanation
Option A (A-): Incorrect. A bond rated A- can be downgraded one category (to BBB-) and still remain within the investment-grade category.
Option B (BB-): Incorrect. A bond rated BB- is already classified as non-investment grade, so a downgrade would not change its status.
Option C (BBB-): Correct. BBB- is the lowest rating within the investment-grade category. A one-category downgrade (from BBB- to BB-) would transition the bond to non-investment grade, aligning with the analyst's concern.
This question assesses the understanding of credit rating categories and their implications for bond classification.
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An analyst is evaluating the potential downgrade of a bond by Standard & Poor's, which could result in it becoming non-investment grade. The current rating of this bond is most likely:
