Practice Test Moody's Analytics

Based on these information: current secured INR 35,000 and current unsecured INR 20,000; non- current secured INR 75,000 and non-current unsecured INR 60,000, what is this company’s total amount of subordinated debt outstanding?

• INR 55,000

• INR 80,000

• INR 110,000

• INR 135,000

What would describe a non-fund-based facility?

• A facility that is lower risk than a fund-based facility.

• A facility that may result in a funded obligation if the customer fails to settle any payments due.

• A credit facility that incurs a monetary obligation when draw down occurs.

• A facility that is similar to a fund-based facility in terms of how it is recorded in a bank’s books.

How are surrounding businesses affected when an environment is dominated by two large employers?

• Neutral on sales and profitability.

• Loss of one of the employers creates high over all risk.

• Increased employment reduces the risk for theindustry.

• The impact is significant only if a catastrophic market down turn occurs.

what type of capital investment is intangible and financial in nature?

• Applying for patents

• Developing new products.

• Listing securities on a stock exchange.

• Replacing existing plant and equipment.

For how many days can an account remain continuously in excess of the sanctioned limit before it is considered out of order?

• 30

• 60

• 90

• 120

which party enforces a bank guarantee in the event of default?

• Applicant

• Beneficiary

• Government

• Guarantor

which factor will most likely reduce loss given default?

• Amount of the loan

• Duration of the loan

• Industry of the borrower

• Seniority of the loan

During which implementation phase of deal structure is counsel instructed on documentation and covenant definition issues?

• Design

• Drawdown

• Monitoring

• Negotiation

which is an example of an insurance covenant in a credit agreement?

• Prohibition on providing other creditors security over any assets

• Restriction on incurring new debt above a pre-determined amount

• Requirement to pay premiums on schedule to avoid a lapse of coverage.

• Obligation to submit security valuations performed by an independent appraiser.

which financial trigger can be set up internally as an early signal of a borrower’s probability of default?

• Change in profit projections

• Change in ownership structure

• Unexpected change in dividend policy

• Emergence of new competitive entrants in the market