As a fixed-income portfolio manager, how would you explain the fact that a bond you owned stayed at a price of $85 when the bond was upgraded by Moodys from Aa3 to Aa2?

a) Bond investors dont pay significant attention to the rating agencies and focus more on their initial ratings then their future rating actions.

b) Since the market was already expecting the rating upgrade by Moodys, investors had already priced in this upgrade ahead of the rating agency action.

c) There is usually a 3-6 month lag from when rating agencies upgrade or downgrade a bond until the market prices in this rating action.