External and Internal Credit Ratings and Country Risk
Free GARP FRM Part I lesson in Valuation and Risk Models. 23 min read, ~3,416 words.
External ratings (S&P, Moody's, Fitch) ordinal-rank issuers from AAA to D; investment grade ends at BBB-/Baa3, below is high-yield. Ratings opine on default probability, not loss given default. The BBB-/Baa3 boundary drives institutional mandates and creates a price cliff that matters more than any single notch within a category. Through-the-cycle...
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What this lesson covers
- Content
- Example 1
- Example 2
- Common Mistakes
- Check Your Understanding
- Exam Shortcuts
Learning objectives
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