SIE Exam Question 51: Answer and Explanation

Question: 51

What rating must a bond receive to be considered investment grade?

• A. Aaa/AAA
• B. Aa/AA
• C. A/A
• D. Baa/BBB

Correct Answer: D

Explanation:

To be considered investment grade, a bond must receive a rating of at least Baa/BBB. Aaa/AAA and Aa/AA are the highest credit ratings, meaning these bonds are high quality investment grade. A/A is better than Baa/BBB, so these bonds are still investment grade.