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Which are the benefits of credit-rating to investors?a.All of theseb.Saving of resourcesc.Credibility of issuesd.Safeguard against bankruptcy

Question

Which are the benefits of credit-rating to investors?a.All of theseb.Saving of resourcesc.Credibility of issuesd.Safeguard against bankruptcy

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Solution

The benefits of credit-rating to investors include:

a. All of these: This option implies that all the listed benefits apply. Credit-rating provides multiple benefits to investors, which are further detailed in the following options.

b. Saving of resources: Credit ratings provide an assessment of a debtor's ability to repay their debt. This information can save investors time and resources that they would otherwise spend on conducting their own research and analysis.

c. Credibility of issues: Credit ratings can enhance the credibility of financial instruments. A high credit rating indicates that the issue has a low risk of default, which can make it more attractive to investors.

d. Safeguard against bankruptcy: Credit ratings can serve as a safeguard against bankruptcy. A low credit rating can signal a high risk of default, which can help investors avoid potentially risky investments.

Therefore, the answer is a. All of these.

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