1. Which reduces the risk of dramatic rate swings when borrowing at prevailing interest rates?
A. Reserve requirements on credit facilities of less than 365 days
B. Negotiating multi-year credit line commitments (revolving credit agreements)
C. Interest-rate caps, collars, swaps, floors
D. Averaging interest rate quotes of at least 8 banks
2. Which is true of credit rating agencies?
A. Issuer credit ratings consider issuer attributes and specific terms of the issue.
B. Quantitative ratings use only the company’s financials.
C. Corporate issuers are rated on management quality, firm competitiveness, expected industry growth, business cycle vulnerability, technology and regulatory changes, and labor relations.
D. Sovereigns/sub-sovereigns are not rated.