n NISM Certifications
XV NISM Series XV
Medium

Identify the true statement about credit rating.

Practice question from NISM XV Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Relevant only to equity shareholders with debt

  2. Relevant to equity shareholders as company must service debt first

    Correct answer

  3. C

    Not relevant to equity shareholders

  4. D

    None of the above

Why this is the answer

Equity holders’ returns depend on the company meeting debt obligations. A high credit rating indicates lower default risk, benefiting equity investors indirectly.

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