How does credit rating affect the bid-ask spread?
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Who would you rather do business with? A AA rated company or a BB rated company?
Obviously with an AA rated… But they are saying that AA rated is not likely to be much tighter spread than low rated i.e. AA would have wider spreads which should not be correct I guess…
Please correct me if I am missing anything…
Yeah, because you are dealing short term na, where credit risk is not your biggest concern.