rating

noun
rat·​ing | \ ˈrā-tiŋ How to pronounce rating (audio) \

Definition of rating

1 : a classification according to grade specifically : a military or naval specialist classification
2 chiefly British : a naval enlisted man
3a : relative estimate or evaluation : standing the school has a good academic rating
b : an estimate of an individual's or business's credit and responsibility
c : an estimate of the percentage of the public listening to or viewing a particular radio or television program
4 : a stated operating limit of a machine expressible in power units (such as kilowatts of a direct-current generator) or in characteristics (such as voltage)

Examples of rating in a Sentence

The school has an above-average academic rating. The article compares the fuel-economy ratings of various cars.

Recent Examples on the Web

This surge protector has a 4.5 star rating over 357 reviews. Michael Simon, PCWorld, "I just bought another of these Belkin 10-outlet surge protectors for $20 and you should too," 25 Oct. 2018 Reporting by Liz Biro / IndyStar Amy Haneline / IndyStar Four- and five-star ratings. Liz Biro, Indianapolis Star, "Tie Dye Grill is closing, for good this time. Say goodbye to one of Indy's best tenderloins.," 9 July 2018 Of the four helmets awarded Virginia Tech’s top five-star rating, all had the MIPS technology. Alan Levin, Bloomberg.com, "Bicyclists’ Injury Risk Could Be Doubled If They Lack Latest Helmets," 26 June 2018 But the backlash went into high gear on Yelp, where detractors swarmed the restaurant's public listing and flooded it with one-star ratings and politically charged comments. Daniel Arkin /, NBC News, "This restaurant booted Sarah Sanders, then came the digital pitchforks.," 25 June 2018 This bottle is a best seller on Amazon, with more than 1,200 customer reviews and a four-and-half star rating. Caroline Picard, Good Housekeeping, "Why Your Sunburn Itches — And How to Stop It," 19 Apr. 2019 The Standard & Poor’s ratings agency last month said a no-deal Brexit could push the British economy into recession and cause unemployment to spike to 7.4 percent by 2021. Pan Pylas, The Seattle Times, "EU workers leave UK in record numbers as Brexit looms," 13 Nov. 2018 The bond rating agency Moody's downgraded Tesla's debt back in March, causing Tesla's outstanding bonds to trade well below face value. Timothy B. Lee, Ars Technica, "Tesla’s cash crunch, explained," 26 July 2018 Similarly, what looked earlier in the year like a steadily climbing Trump job approval rating seems to have leveled off. Ed Kilgore, Daily Intelligencer, "Democrats Look Good Again on Key Midterm Polling Numbers," 12 July 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'rating.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of rating

1702, in the meaning defined at sense 1

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Last Updated

14 May 2019

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The first known use of rating was in 1702

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More Definitions for rating

rating

noun

Financial Definition of rating

What It Is

In personal finance, the term rating commonly refers to a credit rating score issued by the Fair Isaac Corporation (a "FICO score"). A person's credit rating indicates how creditworthy he or she is.

In corporate finance, rating usually refers to a "grade" assigned to a bond, bond issuer, insurance company or other entity or security to indicate its riskiness. Securities analysts often issue ratings on stocks; these ratings are usually "Buy," "Sell" or "Hold."

How It Works

Bond rating agencies like Moody's and Standard & Poor's (S&P) provide a service to investors by grading fixed income securities based on current research. The rating system indicates the likelihood that the issuer will default either on interest or capital payments.

For S&P,  the ratings vary from AAA (the most secure) to C.
For Moody's, the ratings go from Aaa to D, which means the issuer is already in default.

Only bonds with a rating of BBB or better are considered "investment grade." BBB bonds are considered to be suitable for investment by institutions. Anything below the triple-B rating is considered to be junk, or below investment grade. Bond ratings are periodically revised based on recent data.

Treasury bonds are not rated because they are backed by the "full faith and credit" of the United States government. They are considered to be the safest of investments because the government has the power to levy taxes in order to pay its debts.

Why It Matters

Ratings have huge influence on the price and demand for certain securities, particularly bonds: The lower the rating, the riskier the investment and the less the investment is worth. Low ratings often lead to less trading activity and thus liquidity problems. This is why downgrades (or rumors of downgrades) in an issuer's credit rating can have a significant impact on its securities and on the market or industry.

Bonds are not the only securities affected by credit ratings, however. Preferred stock prices can move sharply when the issuer's credit rating changes (as this is an indicator of the issuer's ability to meet preferred dividend obligations). Securities that are convertible into a company's debt are also affected by credit ratings, especially if the convertible security is trading near or above the point at which the holder may convert the security to debt.

Low ratings are not always bad. They simply mean there is more risk associated with an investment and thus more potential for higher returns. In fact, many income investors actively enhance their returns by dividing securities into sectors based on certain characteristics such as credit rating, yield, coupon, maturity, etc., and then finding those sectors that will perform most favorably for the investor under certain market conditions.

Grouping securities by rating is common because investors are trying to rank investments, buy those positioned to improve and sell those expected to decline. An issuer doesn't need to actually default or lose money for an investor to lose money, however -- remember that the simple threat of default or decline can lower the price of the security. This threat could be sensitivity to adverse business conditions, rumors of a ratings downgrade or inaccuracy of ratings agency opinions.

Source: Investing Answers

rating

noun

English Language Learners Definition of rating

: a measurement of how good, difficult, efficient, etc., something or someone is
: numbers that show how many people watch or listen to a particular television or radio program
: a symbol that is officially given to a movie, video game, etc., to tell people what audience it is appropriate for

rating

noun
rat·​ing | \ ˈrā-tiŋ\

Kids Definition of rating

: a position within a grading system credit rating

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Rhyming Dictionary: Words that rhyme with rating

Spanish Central: Translation of rating

Nglish: Translation of rating for Spanish Speakers

Britannica English: Translation of rating for Arabic Speakers

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