Exam 6: Fundamentals of Credit Analysis

The priority of claims for senior subordinated debt is:

Funds from operations (FFo) of Pay Handle ltd increased in 2011. in 2011 the total debt of the company remained unchanged, while additional common shares were issued.Pay Handle ltd's ability to service its debt in 2011, as compared to 2010, most likely:

Credit yield spreads most likely widen in response to:

Which of the following factors would best justify a decision to avoid investing in a coun- try's sovereign debt?

if goodwill makes up a large percentage of a company's total assets, this most likely indi- cates that:

Holding all other factors constant, the most likely effect of low demand and heavy new issue supply on bond yield spreads is that yield spreads will:

Which of the following factors in credit analysis is more important for general obligation non-sovereign government debt than for sovereign debt?

When determining the capacity of a borrower to service debt, a credit analyst should be- gin with an examination of:

Which of the following accounting issues should mostly likely be considered a character warning flag in credit analysis?

The factor considered by rating agencies when a corporation has debt at both its parent holding company and operating subsidiaries is best referred to as:

Which type of security is most likely to have the same rating as the issuer?

Among the Four Cs of credit analysis, the recognition of revenue prematurely most likely reflects a company's:

The two components of credit risk are default probability and:

The notching adjustment for corporate bonds rated Aa2/AA is most likely:

based on the information in Exhibit 3, the credit rating of davide Campari-Milano S.p.A. is most likely:ExHibiT 3 European Food, beverage, and Tobacco industry; Associated british Foods plc; and Davide Campari-Milano S.p.A. Selected Financial Ratios, 2010

based on the information provided in Exhibit 1, the EbiTdA interest coverage ratio of Adidas AG is closest to:

A credit analyst is evaluating the creditworthiness of three companies: a construction company, a travel and tourism company, and a beverage company. both the constructionAnd travel and tourism companies are cyclical, whereas the beverage company is non-Cyclical. The construction company has the highest debt level of the three companies. TheHighest credit risk is most likely exhibited by the:

in the event of default, the recovery rate of which of the following bonds would most likely be the highest?

in the event of default, which of the following is most likely to have the highest recovery rate?

in contrast to high-yield credit analysis, investment-grade analysis is more likely to rely on: