Bond or debt securities pay a stated rate of interest. This rate of interest is dependent on the risk associated with the investment. Also, bond prices change when the risks associated with those bonds change. Standard & Poor’s provides ratings for companies that issue debt securities. 

Instructions 

Go to the Standard & Poor's website and then answer the following questions. 

a. Explain the meaning of an “A” rating. Explain the meaning of a “C” rating. 

b. What types of things can cause a change in a company’s credit rating? 

c. Explain the relationship between a company’s credit rating and the merit of an investment in that company’s bonds.