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How does S&P make money?

pietromas · 2010-04-27 22:40:09

Totally random from someone who knows 0 about economics ... How do Standard & Poors make their money? They are just a company, right? They are a credit rating agency right? I presume that means they look at countries/companies and assign a numeric value to the risk of lending to them. Is that much correct? They also…

27-04-2010 11:40pm

#1

pietromas

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Totally random from someone who knows 0 about economics ...

How do Standard & Poors make their money? They are just a company, right?

They are a credit rating agency right? I presume that means they look at countries/companies and assign a numeric value to the risk of lending to them. Is that much correct?

They also operate as some kind of futures market right? S&P500 or something, which allows people to bet on the ratings that S&P will assign in the future?

But how do they fund their operation and make a profit? Is it just through consultancy or something, and the above two functions are just done to maintain their profile/authority?

Just curios.

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#2 27-04-2010 11:47pm

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http://en.wikipedia.org/wiki/S%26P is a good place to start.
But basically, the firms pay s and p to rate them.

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