How is the relationship between a bond\'s credit rating and its interest rate be

Question

How is the relationship between a bond's credit rating and its interest rate best defined? Inverse relationship Direct relationship Unrelated Logarithmic One reason suggesting that banks may be better than individuals at matching lenders to borrowers is that banks: can shift loan risk to their deposit customers. are motivated by the potential for profit. do not have any income tax liability. have information to evaluate creditworthiness. A bond differs from a share of stock in that a bond: represents a claim on the firm. has more risk. has guaranteed returns. has a maturity date.

Explanation / Answer

#3) Answer is A Inverse relationship

a bond with a low credit rating will demonstrate a higher yield than a bond with a high credit rating

#4) A) Bank can shift loan risk to their deposit customers and D Have information to evaluate credit worthiness

#5) A) represents a claim on the firm

C. Has guaranteed returns and D has a maturity date.

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