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.
Related or Semi-related Video
Finance: What are the Differences in S&P...27 Views
finance a la shmoop what are the differences in S&P's, and Moody's
ratings? capital letters. really that's about it the assessment of the rating
itself is about the same. the people work at both companies all came from about [grinning men walk in front of a school]
the same schools the same semi diversified backgrounds and well they
all eat the same white bread. note the nomenclature differences here though.
Moody's does in fact look kind of moody with a big fat capital letter in the
beginning followed by small letters and slightly different notations. the S&P is
all in caps all shouting all the time. the metrics behind say a quote highly [chart shown]
speculative bond unquote down here are about the same for both companies but
the slight differences are worth noting so that when you see a rating well you
know just by the way in which it's written who wrote it.
now as for actually understanding bond ratings well that's a different story. to [document shown]
most people they might as well be hieroglyphics. [confused woman reads paper]
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