Bond Ratings
Which bond rating indicates investment grade quality?
Investment grade: AAA to BBB. Junk/High-yield: BB and below.
Complete Analysis & Legal Rationale
BBB (or Baa for Moody's) is the lowest investment grade rating. Anything below BBB/Baa is considered speculative or "junk" grade.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
BB is below investment grade - it's the highest speculative (junk) rating.
CCC is deep junk territory - high risk of default.
Matches the verified teaching point in the explanation.
D means the bond is in default.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.