Rating

AAA

DEFINITION of 'Rating'

1. An evaluation of a corporate or municipal bond's relative safety from an investment standpoint. Basically, it scrutinizes the issuer's ability to repay principal and make interest payments.

2. An analyst's recommendation on whether to buy, sell or hold a specific stock.

INVESTOPEDIA EXPLAINS 'Rating'

Bonds are rated by various organizations such as S&P and Moody's. Ratings range from AAA or Aaa (the highest), to C or D, which represents a company that has already defaulted.

RELATED TERMS
  1. Bond Rating

    A grade given to bonds that indicates their credit quality. Private ...
  2. Hold

    An analyst's recommendation to neither buy nor sell a security. ...
  3. Default Risk

    The event in which companies or individuals will be unable to ...
  4. Analyst

    A financial professional who has expertise in evaluating investments ...
  5. Standard & Poor's - S&P

    The world's leading index provider and the foremost source of ...
  6. Upgrade

    A positive change in the rating of a security. An upgrade is ...
Related Articles
  1. Insurance

    What You Need To Know About Financial Analysts

    Thinking about relying on analyst recommendations for your next trade? We'll show you what to watch out for.
  2. Economics

    Target Prices: The Key To Sound Investing

    Learn how to evaluate the legitimacy of target prices and why investors should trust these over ratings.
  3. Investing Basics

    Why There Are Few Sell Ratings On Wall Street

    We outline reasons that may show why enforcing more sell ratings isn't guaranteed to increase Wall Street's objectivity.
  4. Professionals

    Research Report Red Flags For Brokers

    Discover how to look past analysts' ratings to find winning stocks for your clients.
  5. Retirement

    Stock Ratings: The Good, The Bad And The Ugly

    Stock ratings are both loved and reviled. Find out why they deserve equal measures of both.
  6. Active Trading

    The Ups And Downs Of Biotechnology

    This volatile sector can provide huges gains, but there's also lots of downside.
  7. Investing

    Reassessing Your Approach To Bond Investing

    Rethinking your fixed-income portfolio may not resonate in quite the same way as dropping 10 pounds or finally giving up that smoking habit.
  8. Investing Basics

    What is common stock and preferred stock?

    Learn about the differences between common and preferred shares. Explore situations where preferred shares have more favorable rights of ownership.
  9. Investing Basics

    Are over-the-counter stocks different from other stocks?

    Explore the difference between stocks traded over-the-counter and those listed on the NYSE or Nasdaq. Learn how price affects prospects for a stock.
  10. Investing Basics

    What assets are most risky and what assets are safest?

    Learn about the safest and riskiest assets to invest in. Explore savings accounts, T-bills, certificates of deposit, equities and derivatives.

You May Also Like

Hot Definitions
  1. Treasury Bond - T-Bond

    A marketable, fixed-interest U.S. government debt security with a maturity of more than 10 years. Treasury bonds make interest ...
  2. Weight Of Ice, Snow Or Sleet Insurance

    Financial protection against damage caused to property by winter weather specifically, damage caused if a roof caves in because ...
  3. Weather Insurance

    A type of protection against a financial loss that may be incurred because of rain, snow, storms, wind, fog, undesirable ...
  4. Portfolio Turnover

    A measure of how frequently assets within a fund are bought and sold by the managers. Portfolio turnover is calculated by ...
  5. Commercial Paper

    An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts receivable, inventories ...
  6. Federal Funds Rate

    The interest rate at which a depository institution lends funds maintained at the Federal Reserve to another depository institution ...
Trading Center