Question : Assertion: Credit rating agencies assess the creditworthiness of issuers.
Reason: Credit rating agencies issue government bonds.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Assertion is false, but the reason is true.
Correct Answer: Assertion is true, but the reason is false.
Solution : The correct answer is (c) Assertion is true, but the reason is false.
The assertion is true. Credit rating agencies do assess the creditworthiness of issuers, which includes evaluating their ability to meet debt obligations and repay loans.
The reason is false. Credit rating agencies do not issue government bonds or any other financial securities. Their role is to evaluate and provide ratings for these bonds based on their assessment of the issuer's creditworthiness. They do not issue the bonds themselves. Therefore, the reason does not correctly explain the assertion.
Question : Assertion: SEBI's development functions focus on regulating credit rating agencies.
Reason: SEBI aims to promote the orderly growth and development of the securities market.
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