CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

Which C is generally not used by commercial banks when they perform sovereign debt credit analysis?

A. Character
B. Collateral
C. Capacity
D. Covenants
Correct Answer: B

Sovereigns rarely provide collateral when they borrow.

User Contributed Comments 8

User Comment
ssradja Interesting. How about covenants?
jmcarr02 How could a country provide collateral... lol! I imagine a banker asking for bunch of road or an administrative building.
CheeHong I would imagine those are good collaterals.
Just that we never knew when the national army will come storming in to seize them back again.
TheHTrader What does Character stand for?
Sailor85 Character is a measure of the borrower's past payment history. In consumer lending, it is normally evaluated by pulling a credit report.
rocyang Poor south americans...
jonan203 well, the tax payers and their future earnings are implied to be the collateral of US debt...
chcarnes unsecured = no collateral!
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