Answer:
Yesterday, bonds for Not So Risky Inc. were traded for $985.63, which were upgraded by S&P from BB to BBB today. If everything else is constant from yesterday (expected inflation rate etc.), the bonds' price should be higher than what it was yesterday(higher than $985.63).
Explanation:
Following the fact that the rating has been upgraded, the risk would reduce and the required return from these bonds would also reduce, thereby leading to an increase in the price of the bond.
Therefore, if everything else is constant from yesterday (expected inflation rate etc.), the bond's price should be higher than what it was yesterday(higher than $985.63).
