Which of the following statements about Sovereign credit rating is correct 1 A credit rating downgra...........

Economic Affairs Foreign Investment

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Which of the following statements about Sovereign credit rating is correct?

1. A credit rating downgrade means that the risk of investing in the country has gone up.

2. Improvement in credit rating brings down the costs of overseas borrowing

3. Improvement in credit ratings attract foreign direct investments

Choose the correct answer from the option given below

1 only

2 and 3 only

3 only

All of the above

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Explanation:

All the statements are correct.
A sovereign credit rating is the credit rating of a country or sovereign entity. Sovereign credit ratings give investors insight into the level of risk associated with investing in a particular country, including its political risk.
Any international credit rating agency upgrading the sovereign rating clearly shows the faith they have on the country's economic policies. This will also have an indirect positive effect on corporate sector when they borrow abroad. It will have a positive impact on corporate borrowing.