Default Risk & Bond Ratings.  Essentials of Investments, CPA exam BAR. CFA Exam
Channel: Farhat Lectures. The # 1 CPA & Accounting Courses
Date: 2020-09-17

In this video, I discuss default risk. Default risk is the risk that a lender takes on in the chance that a borrower will be unable to make the required payments on their debt obligation. Lenders and investors are exposed to default risk in virtually all forms of credit extensions.

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Investment-grade debt is considered to have low default risk and is generally more sought-after by investors. ... Any bond issue given a AAA, AA, A, or BBB rating by S&P is considered investment grade. Anything rated BB and below is considered non-investment grade