Abstract
Moody's ratings assign grades to various companies to evaluate the financial soundness of a company of the company is required to pay the claim money. The article evaluates Moody 's areas of function and the plan of action adopted by Moody.
Known for being the world 's “widely utilized sources” pertaining to risk analysis, credit ratings and related research, Moody 's ratings are regarded as being authentic and dependable. In addition to rating various companies for ascertaining the financial strength and issuer credits, Moody Investor services operate in varied areas. Some of the prominent areas in, which it functions, include the following:
Providing data for research work
It also provides tools for analyzing credit risks
Offers credit opinions
Moody 's ratings:
The ratings performed by Moody 's may involve the following:
Short term tax exempt ratings
These ratings are performed to assess the capacity of the firms to live up to the financial commitments on a short-term basis.
Long term obligation ratings
Moody 's ratings for this category usually ascertains whether a company will be able to pay the finances as promised to the policyholder. It also ascertains that if there is a case of non-payment what is the loss that would be incurred.
Short term taxable ratings
Assessment is done to see if the company is in a position to pay the claim amount should the need arise.
Moody 's ratings as well as research work on markets facilitate a sound understanding of the risks involved in “fixed income securities”. It also adds to the understanding of the “fixed income markets” as well as other allied products like derivative transactions as well as insurance policies.