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Rating Elements
A rating agency earns its reputation by assessing the client's operational performance, managerial competence, management and organizational set-up, and financial structure. It should be an independent company with its own identity. It should have no government interference. Rating of an instrument does not give any fiduciary status to the credit rating agency. It is desirable that the rating is done by more than one agency for the same kind of instrument. This will attract investors' confidence in the rating symbol given.
Rating Symbols
Since the ratings of the agencies will be used even by lay investors, the outcome of the rating should be delivered in an understandable manner. To facilitate this, rating symbols are provided. These rating symbols must be easily comprehensible to the investors to enable them to take investment decisions. The investor will not have to depend wholly on the broker's advice as the rating symbol gives a clue to the credibility of the issuer. Different rating agencies use different symbols and distinct symbols will be assigned to different securities. The rating symbols, however, will have to be clear and definite without any ambiguity or scope for misinterpretation.
Under this approach of Valuation, all cash flows are discounted using single interest rate (discount rate). For example: Consider the 5-year (7.00 percent) Treas
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QUESTION (a) Describe briefly the main security measures to protect E-Banking systems and ensure secure E-Banking transactions. (b) (i) What is a digital certificate? (ii
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How are financial trades made in an over-the-counter market? Discuss the role of a dealer in the OTC market. In difference to the organized exchanges, which have physical locat
Assume you are a professional financial analyst working for a wealthy investor. Your client has $2.6 million to invest and wants to sink it into a single stock (diversification is
Benjamin Tang currently has holdings in the following three companies: E(R) σ
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