investment grade rating

[phwdisse]

Dear David,

Question 105 from 2007 FRM Practice Exam III

This question is about the investment grade rating. From the study notes i know this must be BBB- (S&P or Baa3 (Moody).

The answers are:

a. BB (S&P , Baa (Moody's)
b. BB (S&P , Ba (Moody's)
c. BBB (S&P , Baa (Moody's)
d. None of the above

I thought the answer would be d.

But the answer "in the wold according to GARP" is d :ahhh:

How to pass this exam??????

Kind Regards,

Paul

 

[phwdisse]

The (Garp) said the answer is c.

Sorry typo.

 

[phwdisse]

Found the answer. My mistake. BBB or Baa bonds are above BBB- or Baa3 and so the are investment Bonds.

Sorry for your time.

Regards,

Paul

 

[David Harper CFA FRM]

Paul,

Okay, right, i was just replying to you. You got it. For theses two big buckets, we can ignore the +/- that appends to S&p and the 1/2/3 that appends to Moodys. They don't impact the investment grade cutoff at BBB or Baa. David