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Finance: What are Bond Ratings, and What Do They Mean?

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Dive into this vital exploration of bond ratings, featuring a comparative analysis of risk factors in bonds stemming from various sectors and how bond ratings play a pivotal role in investment decisions. Delve into real-world examples of fluctuating bond performances with a particular lens on the Puerto Rico's bankruptcy and its consequential impact on their bonds.\n\n

This video is an exploration of the concept of bond ratings, a critical factor in making investment decisions.\n
It presents a comprehensible breakdown of what a bond is – a promise to pay back the lent money along with its interest in a predefined period.\n
You will learn how some bonds carry more risks than others, backed by a real-world example of Puerto Rico's bankruptcy in 2017.\n
During the economics shift due to the advent of internet and wireless technology, the crash of several radio and newspaper industries' bonds are also elaborated upon.\n
Despite the majority of bonds fully paying back their scheduled interests and principal, there are circumstances when certain bonds fail to do so.\n
Discusses the role of rating services in assessing borrowers' ability and their likelihood to adhere to their payback commitment.\n
Finally, it presents a bond rating chart, illustrating that AAA bonds are considered to be the superior ones while bonds in the 'C' range are deemed to have underperformed.\n\n

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