Companies assigned a Moody's "Aaa" credit rating have a 2-4% default rate.

Moody's "Aaa"

The highest credit rating given by Moody's Investors Service, denoting the lowest risk of default for bonds and other fixed-income securities.

Default Rate

The percentage of borrowers who fail to remain current on their loans or credit agreements, indicating the level of credit risk associated with a loan portfolio.

Gain insight into the employment of financial analysis methodologies and the drawbacks of financial ratios.

Verified Answer

Jasmine PeralesJul 15, 2024

Final Answer :

False

Explanation :

Companies assigned a Moody's "Aaa" credit rating are considered to have very low credit risk with a default rate of less than 0.1%.

Learning Objectives

Gain insight into the employment of financial analysis methodologies and the drawbacks of financial ratios.

Companies assigned a Moody's "Aaa" credit rating have a 2-4% default rate.

Definitions

Learning Objectives

Learning Objectives

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