Listen to a Business English Dialogue About Not rated
Scarlett: Hey Sophia, have you ever heard of something being labeled as “not rated” in finance?
Sophia: Yes, it means that a credit rating agency hasn’t assigned a rating to a particular security or financial instrument.
Scarlett: That’s right. It could be because the security is relatively new or doesn’t meet the criteria for a rating.
Sophia: Not rated securities can still be traded, but investors should be aware that they carry higher risk since there’s no official assessment of their creditworthiness.
Scarlett: Exactly. Investors need to conduct their own research and analysis to determine if investing in a not rated security aligns with their risk tolerance and investment goals.
Sophia: Are there any advantages to investing in not rated securities?
Scarlett: Well, they might offer higher potential returns compared to rated securities, but that comes with increased risk.
Sophia: Got it. So, it’s important for investors to carefully consider the potential risks and rewards before investing in not rated securities.
Scarlett: Absolutely. Conducting thorough due diligence and understanding the underlying factors affecting the security’s value are crucial.