Final answer:
When an issuer's credit rating is downgraded, it negatively impacts the investment company security known as bonds.
Step-by-step explanation:
When an issuer's credit rating is downgraded, it negatively impacts the investment company security known as bonds. Bonds are debt instruments issued by companies or governments to raise capital.
They have a fixed rate of interest that is paid to bondholders, and their value is affected by factors such as interest rates and the creditworthiness of the issuer.
When a company's credit rating is downgraded, the perceived risk of default increases, leading to a decrease in the value of the bonds.