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Raising the quality rating of a security because of new optimism about the prospects of a firm due to tangible or intangible factors. This can increase investor confidence and push up the price of the security.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


1. An improvement to an existing product. Some companies, especially technology companies, offer upgrades to customers for free or at a discount.

2. An improvement to the quality of securities in a portfolio. For example, one may sell a stock with a given risk and return and buy another stock with a higher return at the same level of risk. Alternatively, a security may upgrade by itself; for example, its issuer may announce higher than expected earnings, and, therefore, a higher dividend.

3. An increase in a bond rating. For example, if a bond goes from a junk rating to an investment-grade rating, the bond is said to be upgraded. This usually occurs when the issuer reduces its exposure to one or more risks.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


1. An increase in the quality rating of a security issue. An upgrading may occur for a variety of reasons, including an improved outlook for a firm's products, increased profitability, or a reduction in the amount of debt the firm has outstanding. As circumstances change, upgrading or downgrading of a security takes place once the issue has been initially rated and sold. An upgrading generally can be expected to have a positive influence on the price of the security. Compare downgrading.
2. An increase in the quality of securities held in a portfolio.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.