Which of the following is least likely considered a strong and reliable source of liquidity for a company undergoing a credit analysis? A) Line of credit. B) Ability to use asset securitization. C) Contractual back-up facility. Anyone?
line of credit? since their is no indication of a commited line and thus the bank can tell them fuck you
ummm asset securitization is probably least likely- what happens when the securitization market fails like it did in '08 and no one wants your piece of junk securitizations? A bank line of credit is pretty damn good and so is a contractual back-up facility (not really sure what that means but it sounds good)
^ even if the market crashes you can still sell your accounts, maybe not at the price you would have liked to, but eveything can be sold for the right price, so you can get something out of it their is no indication about this being a commited line of credit, and I am sure if you work for a bank Andrew you would rather not give a company in crisis a loan given that you have the option not 2…
possibly…you have not convinced me yet though, what is the answer jimmy?
The right answer is line of credit. It’s not a guaranteed facility.
asset sec?
Right answer is “Line of Credit”. This one tripped me and the explanation is the same as Gulf mentioned.
dammit i hate you gulf
but good to know
good explanation Gulf. Let’s see more tricky questions like that! Just on the forum, of course, not on the actual exam.