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What is the maximum value of Non-Investment Grade?

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Final answer:

The maximum value of Non-Investment Grade refers to the highest rating assigned to a bond or credit that is below investment grade. Non-investment grade bonds, also known as high-yield or junk bonds, have a higher risk of default compared to investment-grade bonds.

Step-by-step explanation:

The maximum value of Non-Investment Grade refers to the highest rating assigned to a bond or credit that is below investment grade. Non-investment grade bonds, also known as high-yield or junk bonds, have a higher risk of default compared to investment-grade bonds. The rating agencies, such as Moody's or Standard & Poor's, use letter ratings to designate different levels of creditworthiness.

For example, Moody's assigns ratings ranging from Aaa (highest) to C (lowest) for bonds. The highest non-investment grade rating is usually assigned to bonds with a rating of Baa3 or Ba1, depending on the rating agency. Bonds that receive lower ratings, such as Caa/Ca/C, are considered speculative and carry a much higher risk of default.

Investors who are willing to take on higher risk in hopes of receiving higher returns may consider investing in non-investment grade bonds. However, it is important to note that the higher yields offered by these bonds come with a greater risk of default.

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