Some Claim That Ratings Agencies Have a Conflict of Interest

Multiple Choice

Some claim that ratings agencies have a conflict of interest since:

A) they rate the quality of their own bonds
B) since agencies charge firms for their services rather than investors, they have an incentive to give high ratings to gain business
C) government began to include bond ratings as part of regulations of mutual funds, banks, and financial firms
D) they issued many of the mortgages that were later securitized into bonds