Bond ratings are an important element of the bond market. Explain what bond ratings are, who issues the ratings, and what the ratings mean to the average investor
What will be an ideal response?
Answer: Bond ratings are letter grades that designate a bond's investment quality. They are issued by agencies such as Moody's, Standard & Poor's, Fitch Investor Services and Duff & Phelps. Bond analysts study each bond issue for factors such as the bond's provisions and the issuing company's financial stability and then issue the rating. "A" ratings are highest, then "B" ratings, followed by "C" ratings for bonds that are at or near default and finally "D" ratings for bonds that are in default. For investors, ratings measure an issue's default risk. Other things being equal, the higher the rating, the higher the bond price and the lower the yield.
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Country Bank believed that Mandy and Kay were partners in an e-business. Mandy and Kay were not partners. Mandy owned the business as a sole proprietor. Kay, however, was a close friend of Mandy's. When Mandy visited Country Bank in an effort to obtain a $10,000 loan, Kay went with her. During the conversation with the banker, Mandy referred to Kay as "my partner." Country Bank made the business
loan believing that Mandy and Kay were partners. Mandy defaulted on the loan. Country Bank claims that both Mandy and Kay are liable on the loan. Is Country Bank correct in doing so? a. Yes. This illustrates a partnership by estoppel. b. No. Kay was a dissociated partner. c. No. Kay was not a partner in the business. d. No. There was no intent to have a partnership.
Scholarships (tuition discounts) provided to students where no service is required:
A. Are included in tuition revenue and recorded as an expense. B. Are reported as an adjustment to tuition revenue in the government-wide statements. C. Are not included in tuition revenue but are included as an "other source". D. Are reported as a reduction of revenue by directly reducing the revenue account or increasing a contra- revenue account.
An individual with gross income of $5,000 could qualify as a qualifying child of another taxpayer but could not qualify as a qualifying relative of another taxpayer.
Answer the following statement true (T) or false (F)
In general, ambiguities in a written agreement are resolved against the party who drafted the agreement.
a. true b. false