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Evaluate Investment Information Sources
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DSST
DSSTPF.251 Evaluate Investment Information Sources
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A student sees a strong rating on a bond fund and assumes the fund's share price cannot decline. Which correction best reflects the role of ratings?
A
Ratings may address credit quality or methodology, but they do not eliminate interest-rate, liquidity, or market-price risk.
B
A rating means the fund's price is guaranteed by the rating agency.
C
Ratings replace the need to read the fund's prospectus.
D
A rating provides the fund's exact bid and ask quotes.
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