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Does A Credit Rating Assure Repayment? |
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Answer» A credit RATING is not an assurance of repayment of the rated instrument. Rather, it is an OPINION on the RELATIVE degree of RISK associated with such repayment. This opinion represents a probabilistic estimate of the likelihood of default. A credit rating is not an assurance of repayment of the rated instrument. Rather, it is an opinion on the relative degree of risk associated with such repayment. This opinion represents a probabilistic estimate of the likelihood of default. |
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