1．An analysis of the credit quality of the collateral is most important in assessing the creditworthiness of:

A)   a corporate bond issue.

B)   a municipal bond issue.

C)   a sovereign bond issue.

D)   an asset-backed securities issue.

2.Which of the following is NOT a factor used in assessing the credit quality of a national government's local currency debt?

A)   Balance of payments and structure of the external balance sheet.

B)   Income and economic structure.

C)   Fiscal policy and budgetary flexibility.

D)   Monetary policy and inflation pressures.

3.A very similar analysis is required for which two types of debt?

A)   Municipal bonds and asset-backed securities.

B)   Municipal bonds and sovereign debt.

C)   Sovereign debt and corporate bonds.

D)   Corporate bonds and asset-backed securities.

4.An evaluation of the quality of the servicer is a key consideration for which type of credit?

A)   Asset-backed securities.

B)   Corporate bonds.

C)   Municipal bonds.

D)   Sovereign debt.

5.The assessment of which of the following types of debt require that the analyst use only qualitative factors, only quantitative factors or both qualitative and quantitative factors?

A)   Corporate bonds - both; sovereign debt - both; municipal debt - quantitative.

B)   Corporate bonds - both; sovereign debt - quantitative; municipal debt - quantitative.

C)   Corporate bonds - both; sovereign debt - qualitative; municipal debt - quantitative.

D)   Corporate bonds - both; sovereign debt - both; municipal debt - both.

1．An analysis of the credit quality of the collateral is most important in assessing the creditworthiness of:

A)   a corporate bond issue.

B)   a municipal bond issue.

C)   a sovereign bond issue.

D)   an asset-backed securities issue.

The correct answer was  D)

Analyzing the credit quality of the collateral is important in the issuance of asset-back securities.

2.Which of the following is NOT a factor used in assessing the credit quality of a national government's local currency debt?

A)   Balance of payments and structure of the external balance sheet.

B)   Income and economic structure.

C)   Fiscal policy and budgetary flexibility.

D)   Monetary policy and inflation pressures.

The correct answer was  A)

In assessing the credit quality of local currency debt, only domestic government policies that emphasize fostering or impeding timely debt service are considered. Only for foreign currency debt will credit analysis focus on the interaction of domestic and foreign government policies as measured by a country's balance of payments and the structure of its external balance sheet.

3.A very similar analysis is required for which two types of debt?

A)   Municipal bonds and asset-backed securities.

B)   Municipal bonds and sovereign debt.

C)   Sovereign debt and corporate bonds.

D)   Corporate bonds and asset-backed securities.

The correct answer was  C)

The analysis of sovereign debt is actually very similar to that of corporate debt. Both are concerned with character, capacity, and capital as well as availability and the quality of financial reporting.

4.An evaluation of the quality of the servicer is a key consideration for which type of credit?

A)   Asset-backed securities.

B)   Corporate bonds.

C)   Municipal bonds.

D)   Sovereign debt.

The correct answer was  A)

The quality of the seller/servicer is critical for the assessment of asset-backed securities.

5.The assessment of which of the following types of debt require that the analyst use only qualitative factors, only quantitative factors or both qualitative and quantitative factors?

A)   Corporate bonds - both; sovereign debt - both; municipal debt - quantitative.

B)   Corporate bonds - both; sovereign debt - quantitative; municipal debt - quantitative.

C)   Corporate bonds - both; sovereign debt - qualitative; municipal debt - quantitative.

D)   Corporate bonds - both; sovereign debt - both; municipal debt - both.

The correct answer was  D)

Corporate, sovereign, and municipal debt all require quantitative and qualitative elements of analysis.