Question $18(1$ point$)$

Typical individuals have difficulty judging the default risk of any one company, let alone thousands of firms that sell bonds in a developed economy. To address this problem,

individuals should never invest in bonds.

the price of bonds increases as more information is available to investors.

borrowing entities rate their own bonds.

the government assigns ratings of borrowing entities.

$5)$ private rating agencies evaluate and then grade the default risk of borrowing entities.