CCRA-L2 Questions and Answers

The longer the term to maturity of bond:

Scott is a credit analyst with one of the credit rating agencies in India. He was looking in Oil and Gas Industry companies and has presented brief financials for following 4 entities:

Which of the four entities has best interest coverage ratios?

Which of the following is not an importance of the sovereign rating?

A holder of which of the following types of bonds is least likely to suffer from rising interest rates?

Short term rates are determined by____________

During FY13, Small Bazar, a leading retail company has sold three of its prime properties for a sum of USD 24 Million. The same had a carrying value of USD 30 Million.

Analyst had considered the same as operating income and considered it to be part of operating expenses.

However, she realized her mistake and recorded the loss as non-operating loss. Which of the following ratio will not change despite the correction?

A) EBITDA Margins

B) Interest Coverage

C) PAT Margins

D) Gross Profit Margin

The following information pertains to bonds:

Further following information is available about a particular bond ‘Bond F’

There is a 10.25% risky bond with a maturity of 2.25% year(s) its current price is INR105.31, which corresponds to YTM of 9.22%. The following are the benchmark YTMs.

Following are the relevance of Industry Analysis:

Statement 1: Evaluating Industry risk is the first and foremost step for top down approach of analysis.

Statement 2: Industry Analysis is relevant for analyzing the industry life cycle, which is highly important from

the perspective of an investor or lender.

State which is/are correct?