FIN 610 Week 5 Conference _6-19-15 A. Bond Rating and Risk

| June 2, 2016

Question
FIN 610 Week 5 Conference _6-19-15
A. Bond Rating and Risk –

There are three major rating agencies for debt securities of domestic firms: Standard and Poors,
Moodys and Fitch. Each of the rating services has web pages describing rating process
Answer the following questions

1. Describe the ratings process. According to
2. What are investment grade bonds?
3. Identify the key ratios that might go into assignment of ratings of bonds

Major Rating Websites
http://www.fitchratings.com Fitch
https://ratings.standardandpoors.com/about/about-credit-ratings/ratings-process.html
https://www.moodys.com/

B. Interest Rates
What are the differences to the borrowers between Fixed Mortgage Rate and Variable Mortgage
Rate?

C. Cost of Capital VS Demand
If the cost of capital is low and there is little demand for the product, would companies still expand
their capital investment?

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