Economics · Financial Markets
What is the primary factor considered by Credit Rating Agencies (CRAs) to differentiate between a short-term debt instrument rating and a long-term debt instrument rating?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The size of the issue, with issues above 100 crore rupees classified as long-term.
- 2The type of asset pledged as collateral, with real estate-backed issues being long-term.
- 3The original maturity of the instrument, where a short-term rating is typically assigned to instruments maturing within one year.✓
- 4The market capitalization of the issuing company, with small-cap companies receiving short-term ratings.
Correct answer
The original maturity of the instrument, where a short-term rating is typically assigned to instruments maturing within one year.
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