Bond or debt securities pay a stated rate of interest. This rate of interest is dependent on the risk associated with the investment. Also, bond prices change when the risks associated with those bonds change. Standard & Poor's provides ratings for companies that issue debt securities.

Address: www.standardandpoors.com/ratings/definitions-and-faqs/en/us Instructions Go to the website shown and answer the following questions.

(a) Explain the meaning of an “A” rating. Explain the meaning of a “C” rating.

(b) What types of things can cause a change in a company’s credit rating?

(c) Explain the relationship between a company’s credit rating and the merit of an investment in that company’s bonds.