Which of the Following Scenarios Are Examples of Credit Enhancements

question 57

Multiple Choice

Which of the following scenarios are examples of credit enhancements?

• A)A manufacturing company makes monthly payments into a sinking fund which it will use to repay principal to bondholders when the bonds mature.
• B)A trucking company obtains a lower interest rate on a bank loan for trucks by pledging the vehicles as collateral.
• C)Mortgages on residential properties must be insured by the Canada Mortgage and Housing Corporation if the down payment is less than 20%.
• D)All of the above.

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Definitions:

Supplier-Managed Inventory

A supply chain arrangement where the supplier assumes responsibility for managing inventory levels at the customer's premises, based on agreed parameters.

Inventory-Management System

A tool or software used by businesses to track stock levels, orders, sales, and deliveries to ensure the efficient management of inventory.

Vendor-Managed Inventory System

A supply chain practice where the supplier is responsible for maintaining the inventory levels of their products at the customer's premises.