Question : Statement 1: Credit rating agencies assess the creditworthiness of issuers.
Statement 2: Credit rating agencies issue government bonds to the public.
Option 1: Statement 1 is true, and statement 2 is true.
Option 2: Statement 1 is true, but statement 2 is false.
Option 3: Statement 1 is false, and statement 2 is true.
Option 4: Statement 1 is false, and statement 2 is false.
Correct Answer: Statement 1 is true, but statement 2 is false.
Solution : The correct answer is (b) Statement 1 is true, but statement 2 is false.
Statement 1 is true. Credit rating agencies evaluate the creditworthiness of issuers, whether they are companies, governments, or other entities that issue debt securities. The credit rating assigned by these agencies helps investors assess the risk associated with investing in those securities.
Statement 2 is false. Credit rating agencies do not issue bonds or any financial securities. They assess and provide ratings on bonds issued by various entities, including governments, but they do not issue these bonds themselves.
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