SIE Exam Question 1003: Answer and Explanation

Question: 1003

An investment-grade bond is one that is rated __________ or higher by Moody's. A high-yield bond is rated __________ or lower by Moody's.

• A. Ba, Baa
• B. Baa, Ba
• C. Baa3, Ba1
• D. Baa+, Ba-

Correct Answer: C

Explanation:

An investment-grade bond is one that is rated Baa3 or higher by Moody's. A high-yield bond is rated Ba1 or lower by Moody's.