Question

Municipal bond rating organizations are concerned primarily with the risk of:

A. Declining purchasing power
B. Market price fluctuations
C. Default
D. Illiquidity

Answer 1

Municipal bond rating organizations are primarily concerned with the risk of default. So, the correct answer is option c.

Step-by-step explanation:

Municipal bond rating organizations are primarily concerned with the risk of default. A bond's rating reflects the organization's assessment of the issuer's ability to make timely payments of principal and interest. The higher the rating, the lower the risk of default. Other risks such as declining purchasing power, market price fluctuations, and illiquidity are also important, but the primary focus of rating organizations is on the risk of default.

So, the correct answer is option c.