66. Analyst 1: Bonds with the same credit rating have a comparable probability of
default and comparable severity of loss given default.
Analyst 2: Bonds with the same credit rating have a comparable probability of
default but the severity of the loss is not necessarily comparable.
Which analyst’s statement is most likely correct?
Neither of them.
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67. An analyst is analyzing industry structure, industry fundamentals, and company
fundamentals while rating a particular corporate bond. Which component of
credit analysis is he currently analyzing?
68. Which of the following assets is not included in the value of collateral while
analyzing the collateral for a debt issue?
69. The quality and value of the assets supporting the issuer’s indebtedness is called:
70. ABC Corp. manufactures a commodity product in a highly competitive
industry in which no company has significant market share and where there
are low barriers to entry. Which of the following best describes ABC’s ability
to take on substantial debt?
Its ability is very limited because companies in industries with those
characteristics generally cannot support high debt loads.
Its ability is strong because companies in industries with those characteristics
generally have high margins and cash flows that can support significant debt.
The information is insufficient to comment on the company’s debt-taking ability.
UGC NET PAPER 1
UGC NET Management
UGC NET COMPUTER SCIENCE
UGC NET COMMERCE
GATE COMPUTER SCIENCE
CFA Level 1
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