Credit ratings affect the yields on bonds. Based on the scenario described in the following table, determine

Credit ratings affect the yields on bonds. Based on the scenario described in the following table, determine

 

 

answer:

Solution:-

Scenario Impact on yield Cost of borrowing money from bond market
1) decrease. less expensive.
2) decrease. less expensive.
3) increase. more expensive.
4) decrease. less expensive.

Note:- All the four scenarios given in question are assigned respectively serial number as 1, 2, 3 and 4 in the above solution.

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