Shipping Econs (Part 11)

What is a ship fund designed for?

• Fleet expansion

• Investment opportunity

• Tax evasion

• Ship construction

Where is an SPC (Special Purpose Company) usually set up for tax efficiency?

• United States

• United Kingdom

• Bahamas

• Australia

What is a challenge faced by 'pure' ship investment funds?

• Limited life

• Ambiguous management structure

• Both a and b

• None of the above

What does leasing do in terms of vessel use and ownership?

• Combines use and ownership

• Separates use and ownership

• Terminates use after ownership

• None of the above

What is the primary advantage of an operating lease?

• Long-term commitment

• Equipment reverts to the lessor

• Termination at the lessee's discretion

• Ideal for big photocopiers

Which type of lease is typically used for long-term finance of LNG tankers and cruise ships?

• Operating lease

• Finance lease

• Short-term lease

• Consumer lease

What is a drawback of finance leases?

• Short-term transaction

• Simplicity in owning a ship

• Complexities in unwinding the lease

• Tax benefits are always certain

What is the starting point for any analysis, whether by an investor or a lender?

• Market analysis

• Cashflow analysis

• Risk analysis

• Economic analysis

What is one of the risks associated with shipping according to the provided information?

• Market risk

• Computer risk

• Artistic risk

• Cultural risk

What risk arises from problems with the ships and the companies that manage them?

• Market risk

• Environmental risk

• Operating risk

• Economic risk