- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 14. Credit Risk
- Subject 1. Sources of Credit Risk
CFA Practice Question
Lately, Inc. is having trouble arranging for credit from new suppliers primarily because Lately has a company policy of paying suppliers 21 days after the due date. Lately has been rejected because of its ______.
B. character
C. capital
D. collateral
A. capacity
B. character
C. capital
D. collateral
Correct Answer: B
User Contributed Comments 8
| User | Comment |
|---|---|
| narfey | what is character? |
| DariSH | character is quality |
| harpalani | Why not capacity? |
| johntan1979 | Should be E. name |
| johntan1979 | To answer harpalani: Not capacity because they have no problem in paying. Ability to pay is ok. |
| schweitzdm | I guessed capacity too. Turning these into flashcards. |
| tichas | Character is behavior , capacity is ability. You might have the ability or capacity to pay but for unknown reasons you pay late and that is behavior or character. |
| abellochs | LOL about E. |