Please answer both parts - thank you!

PART I) As the rating of a bond decreases (for example, from AAA, to AA, to A), it generally means that

A) the credit rating decreases, the default risk increases, and the required rate of return increases.

B) the credit rating increases, the default risk decreases, and the required rate of return increases.

C) the credit rating decreases, the default risk decreases, and the required rate of return decreases.

D) the credit rating increases, the default risk decreases, and the required rate of return decreases.

PART II) Preferred stock ________.

A) reflects residual ownership of a company

B) always has a legal and specific claim to a fixed amount (listed as a liability)

C) will be "paid" before the bondholders

D) will be paid before common stockholders.