rating

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.

Notes:

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.

See also: Bond Rating, Default Risk

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rating

The grading of a security with respect to a characteristic or a set of characteristics such as safety and growth. Rating is most often applied to debt securities, which are graded according to the issuer's ability to pay interest and principal when due. See also bond rating, downgrading, Moody's Investment Grade (MIG), not rated (NR), stock rating, upgrading.