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Which of the following products is adversely impacted if the issuer's credit rating is downgraded?

A. mutual funds
B. unit investment trusts (UITs)
C. Exchange-traded funds (ETFs)
D. Exchange-traded notes (ETNS)

1 Answer

5 votes

Final answer:

Mutual funds, UITs, ETFs, and ETNs are adversely impacted if the issuer's credit rating is downgraded due to increased risk of default on the issuer's debt obligations.

Step-by-step explanation:

The products that are adversely impacted if the issuer's credit rating is downgraded are A. mutual funds, B. unit investment trusts (UITs), C. Exchange-traded funds (ETFs), and D. Exchange-traded notes (ETNs). When the issuer's credit rating is downgraded, it indicates that there is an increased risk of default on the issuer's debt obligations. As a result, the value of the products that rely on the issuer's creditworthiness may decrease, as investors perceive them to be riskier.

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