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ICMA FMFQ Exam - Topic 2 Question 15 Discussion

When a rating agency is assessing a corporate bond rating/ which of the following will they take into consideration in giving their rating?
D) They take into consideration both probability of default and specific severity of potential loss
A) They assume all bonds will repay and so ignore the probability of default
B) They look at the severity of potential loss without considering the probability of default
C) They consider probability of default but must always assume 100% loss

ICMA FMFQ Exam - Topic 2 Question 15 Discussion

Actual exam question for ICMA's FMFQ exam
Question #: 15
Topic #: 2
[All FMFQ Questions]

When a rating agency is assessing a corporate bond rating/ which of the following will they take into consideration in giving their rating?

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Suggested Answer: D

by Louvenia at May 04, 2022, 09:02 AM

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Kara
11 months ago
I thought they only focused on potential losses, not defaults.
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Dallas
11 months ago
A is totally wrong, they can't ignore default risk.
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Amalia
11 months ago
Wait, they assume 100% loss? That sounds extreme!
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Carolann
11 months ago
I agree, D is the right choice!
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Gianna
11 months ago
They definitely consider both probability of default and severity of loss.
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Raymon
11 months ago
I feel like I saw a practice question that mentioned agencies assume some level of default risk. So, I might lean towards option D as well.
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Goldie
11 months ago
I'm not entirely sure, but I remember something about agencies needing to assess potential losses too. Maybe it's option D?
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Jeannetta
11 months ago
I think they definitely consider both the probability of default and the severity of loss. That seems to be the most comprehensive approach.
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Bette
12 months ago
I thought they only looked at the probability of default, but now I'm confused. Could it be that they also consider how bad the loss could be?
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Alita
12 months ago
Okay, I think I've got this. Incident management is about getting people back to work quickly, while problem management is focused on preventing incidents from recurring. I'll select the answer that best captures that distinction.
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Meghann
12 months ago
This seems like a straightforward application of model evaluation principles. I'm confident I can work through this step-by-step and arrive at the right answer.
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Buffy
12 months ago
Hmm, this looks like it's asking about Access database objects. I think I remember learning about modules in Access, but I'm not totally sure how they differ from other objects like forms or queries.
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