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12 January, 09:44

29. A "fallen angel" is a bond that has moved from: A. being publicly traded to being privately traded. B. being a long-term obligation to being a short-term obligation. C. being a premium bond to being a discount bond. D. senior status to junior status for liquidation purposes. E. investment grade to speculative grade.

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  1. 12 January, 09:59
    0
    Option E is correct one.

    Investment grade to speculative grade.

    Explanation:

    A "fallen angel" is a bond that has moved from Investment grade to speculative grade.

    A fallen angel is a bond that was rated investment-grade but has since been downgraded to junk status due to the declining financial position of its issuer. The bond is downgraded by one or more of the big three rating services. These bond issuers create bonds to borrow funds from bondholders, to be repaid at maturity.
  2. 12 January, 11:35
    0
    E. investment grade to speculative grade.

    Explanation:

    The bond which is graded to speculative from investment grad is know as fallen angel. These bonds are initially graded as the investment bonds but later on It is a bond which is classified as junk due to deterioration of financial position of bond's issuer. These bonds may include the corporate, municipal and sovereign debts. The basic reason of downgrading the is fall in the revenue which enables the issuer to pay the interest on the bonds.
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