Credit Risk Analysis Exam 1 Practice Test

What is the highest Moody's rating indicating minimal credit risk?

Aa1 Aaa A1 Ba1

Correct Answer:

Aaa

Explanation:

Moody's rating scale ranks issuers from the lowest risk to the highest risk, with the very top grade reflecting minimal credit risk. The pinnacle rating is Aaa, which is assigned to issuers considered to have negligible likelihood of default. Subcategories like Aa1 are one notch below Aaa and still indicate very high quality, but not the absolute minimal risk. Ratings in the A range (like A1) are lower still, signaling more risk than Aa ratings, while Ba1 falls into non-investment-grade territory, meaning substantial credit risk. So the rating that indicates the highest level of credit safety is Aaa.

Access more questions from this quiz

Continue to Credit Risk Analysis Exam 1 Practice Test for more practice questions and the full quiz experience.

Access More Questions