Asset Quality Rating

Asset Quality Rating is a way to measure the credit risk of an asset, usually those that require payments. In the case of an investment portfolio, the better quality rating will be given to the portfolios with more liquidity and lower cost of the fund itself. The best rating an asset can get is a 1 (always good to be #1, right?) and the worst is a 5.

The 5 isn't necessarily a deal-breaker but means that particular asset really needs to be managed well and has a lot of risk involved...A number-five asset is like a kid coming off the crest of a sugar high.