Question : Statement 1: Credit rating agencies assess the creditworthiness of issuers.
Statement 2: Credit rating agencies issue government bonds to the public.
Option 1: Statement 1 is true, and statement 2 is true.
Option 2: Statement 1 is true, but statement 2 is false.
Option 3: Statement 1 is false, and statement 2 is true.
Option 4: Statement 1 is false, and statement 2 is false.
Correct Answer:
Statement 1 is true, but statement 2 is false.
Solution : The correct answer is (b) Statement 1 is true, but statement 2 is false.
Statement 1 is true. Credit rating agencies evaluate and assess the creditworthiness of issuers, which could be individuals, companies, or governments. They analyze the financial health, repayment history, and other factors to assign a credit rating indicating the issuer's ability to meet debt obligations.
statement 2 is false. Credit rating agencies do not issue government bonds or any financial instruments to the public. They evaluate and rate these bonds based on their assessment of the issuing government's creditworthiness and the risk associated with the bonds. However, the issuance of government bonds is done by the respective government through its treasury or other authorized agencies.
