CORPORATE CREDIT ANALYSIS DECEMBER 2022 PAST PAPER

TUESDAY: 6 December 2022. Afternoon Paper. Time Allowed: 3 hours.

Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper.

QUESTION ONE

1. Explain the meaning of the following terms:

Deed of guarantee and indemnity. (2 marks)

Syndicated loan. (2 marks)

2. Explain FOUR possible outcomes of financial distress and insolvency. (8 marks)

3. Examine FOUR factors that could determine the intensity of competition within an industry. (8 marks)

(Total: 20 marks)

QUESTION TWO

1. Describe the following types of corporate borrowers:

Trustees. (2 marks)

Unincorporated bodies. (2 marks)

2. Explain TWO elements of credit risk appetite manual. (4 marks)

3. Summarise PESTEL model of credit risk assessment. (12 marks)

(Total: 20 marks)

QUESTION THREE

1.  Explain the term “credit monitoring services”. (2 marks)

Outline FOUR reasons why credit monitoring is important to a lender. (4 marks)

2. Describe the term “credit philosophy”. (2 marks)

Differentiate between “value-driven credit culture” and “market-driven credit culture”. (4 marks)

3. Argue FOUR cases for the significance of the firm’s capital structure. (8 marks)

(Total: 20 marks)

QUESTION FOUR

1. State FOUR events of loan default. (4 marks)

2. Discuss FOUR causes of sovereign risks. (8 marks)

3. Evaluate FOUR strategies for improving board of directors’ effectiveness. (8 marks)

(Total: 20 marks)

QUESTION FIVE

1. Identify THREE factors that a credit manager could consider in credit pricing. (6 marks)

2. Elaborate THREE preconditions for debt restructuring. (6 marks)

3. Explain the term “industry risk”. (2 marks)

Summarise THREE types of industrial risks. (6 marks)

(Total: 20 marks)

(Visited 88 times, 1 visits today)
Share this:

Written by