Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An analyst is reviewing possible scenarios that potentially would have a negative impact on a credit rating agency's independence and objectivity related to their rating

An analyst is reviewing possible scenarios that potentially would have a negative impact on a credit rating agency's independence and objectivity related to their rating of asset-backed securities (ABS). Which scenario might prompt the analyst to bypass a specific issue because of its rating?

The sponsoring firm paid all major rating agencies a flat fee to rate their new issue.

One rating agency included scenarios that wetn beyond the historical norms for expected defaults of the assets to determine the risks of the security and its rating.

The only rating agency following a specific security also advised in structuring the product, which fact was not disclosed by the firm.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Principles And Applications

Authors: Arthur J. Keown, J. William Petty, John D. Martin, Jr. Scott, David F.

10th Edition

0131450654, 9780131450653

More Books

Students also viewed these Finance questions

Question

Understand the role of employer branding in talent management.

Answered: 1 week ago