When Determining the Capacity of a Borrower to Service Debt

question 8

Multiple Choice

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

• A) industry structure.
• B) industry fundamentals.
• C) company fundamentals.

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Definitions:

Retirement Portfolio

A collection of financial investments specifically chosen and managed to support an individual's financial needs in retirement.

Stocks

Shares of ownership in a company, that represent a claim on the company's earnings and assets.

Annuities

Financial products that provide a stream of payments for a fixed period or for the lifetime of the annuitant, typically used for retirement savings.

Commodities

Basic goods used in commerce that are interchangeable with other goods of the same type, such as oil, gold, and wheat.