When a bond is described as AA, what does this refer to?
A) A bond that has above average coupon payments
B) A bond that has above average yield to maturity
C) A bond rating of "very strong" capacity to pay interest and principle repayment
D) All of the above are correct.
E) Only A and C are correct.
Answer: C
Business
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Which of the following is least likely to be correct about the factoring of receivables?
A) the selling firm bears the risk of default B) the higher the perceived quality of the receivables, the lower the discount rate C) factoring may be the cheapest method of avoiding a cash flow problem D) the discount is paid by the selling firm in the form of reduced sales price
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