A Credit Analyst Is Evaluating the Creditworthiness of Three Companies

question 17

Multiple Choice

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:

• A) construction company.
• B) beverage company.
• C) travel and tourism company.

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Definitions:

Losers

This term can refer to individuals or entities that do not succeed in a specific endeavor, competition, or economic situation.

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors, leading to potential trade benefits.

Specialize

To focus on a specific area of expertise or production, often to increase efficiency or achieve a higher level of skill in that domain.

Producers Worse Off

A situation where producers face decreased profitability or increased costs due to economic changes.