FRM Part I · FRM Exam Part I · External and Internal Credit Ratings
A risk analyst is comparing rating scales. Which of the following lowest ratings is still classified as investment grade on the S&P scale?
BBB- is the lowest S&P rating still classed as investment grade. Ratings of BB+ and below are speculative grade, so the investment-grade boundary sits between BBB- and BB+, not at A-.
- ABB+
- BBBB-Correct
- CB+
- DBBB-minus is not investment grade; the cutoff is A-
Explanation
On the S&P scale, investment grade runs from AAA down to BBB-. BB+ and below are speculative (non-investment) grade. The cutoff at A- is incorrect because BBB+, BBB and BBB- are all investment grade.
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