Economics Bonds Questions
Credit rating agencies play a crucial role in bond markets by assessing the creditworthiness of bond issuers and assigning credit ratings to their bonds. These ratings provide investors with an indication of the issuer's ability to repay the principal and interest on the bonds. By evaluating the financial health and credit risk of issuers, credit rating agencies help investors make informed decisions and manage their investment portfolios. Additionally, these ratings also influence the interest rates at which bonds are issued, as higher-rated bonds generally offer lower yields due to their lower credit risk.