- CFA Exams
- CFA Exam: Level I 2021
- Study Session 14. Fixed Income (1)
- Reading 45. Introduction to Asset-Backed Securities
- Subject 6. Commercial Mortgage-Backed Securities
CFA Practice Question
Other measures being equal, which DSC ratio would be considered the best from a creditor's perspective?
B. A DSC ratio of 1
C. A DSC ratio of 5
A. A DSC ratio of 0.1
B. A DSC ratio of 1
C. A DSC ratio of 5
Correct Answer: C
The higher the ratio, the more likely the borrower can use the property's cash flow to service the debt.
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