CFA Practice Question

There are 266 practice questions for this study session.

CFA Practice Question

Standard and Poor's issues a report that Altra X Inc.'s bonds have been added to the group of bonds to be analyzed for a possible ratings downgrade. This is an example of ______.

A. default risk
B. credit spread risk
C. downgrade risk
Correct Answer: C

Downgrade risk occurs when a specific issue or issuer comes under the scrutiny of the credit rating agencies.

User Contributed Comments 3

User Comment
magicchip And the outcome will depend on how "nicely" the S&P analyst was treat by the folks at Altra.
Last I heard the analyst was on a pricy cruise ship spending some $$ at the casino tables.
thekid Magicchip:

funny, i heard the same.

rocyang Don't you like that? :)
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