CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

Which statement is true?
A. Highly rated sovereign bonds denominated in local currency are virtually free of credit risk. As of late 2012, bonds issued by the U.S. government were rated at the AAA level by S&P.
B. Agency bonds are usually guaranteed by the national governments.
C. Because commercial paper is a money market instrument, even companies ranked low on creditworthiness are able to use it as a source of short-term financing.
Explanation: A is false. Bonds issued by the U.S. government were downgraded by S&P in 2011.

B is false. Most of agency bonds don't have government guarantees.

C is true. However, only the most creditworthy companies are able to use commercial paper as a source of low-cost short-term financing.

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