Credit markets are driving long-term changes in banks. Forces that combined to lead to a concentration of low-quality credit in loan portfolios include: Group of answer choices A. Remediation D. Large firms borrowing extensively from individual banks B. Disintermediation

Please help with the below minicase.  Directions: The best way to do this case is to use relevant credit information and calculate some financial ratios: ROA, debt ratio, liquidity ratios, ROE, profit margin, Inventory and Asset turnover. Then look at breakeven point probability, and finally the possibility of a repeat order. What can you say about Miami Spice’s creditworthiness? What is the break-even probability of default? How is it affected by the delay before MS pays its bills? How should George Stamper’s decision be affected by the possibility of repeat orders?   MiniCase: George Stamper a credit analyst with Micro-Encapsulators Corp. (MEC) needs to respond to an urgent email request from the southeast sales office. The local sales manager reported that she had an opportunity to clinch an order from Miami Spice (MS) for 50 encapulators at $10,000 each She added that she was particularly keen to secure this order since MS was likely to have a continuing need for 50 encapulators a…

Regarding the following statements about credit fixed income, identify who is correct (select all that apply):     a. Meeyeon: "Credit spreads tighten when the economy is strong, and there is a continued positive outlook."   b. Andrew: "Subordinated debentures are riskier for investors than senior debt." c. Greg: "The G-spread only measures the credit spread between a bond and a government curve over one point of time." d. Yuting: "Investment-grade credit never defaults."   (only a and b is incorrect)

All of the following may be considered causes of the “dark side” of credit except: Group of answer choices B. Operational issues that affect credit assessments can have a systematic effect on the whole consumer portfolio. D. Historical data tends to be consistent and can lead to accurate forecasts. A. Tendency of consumers to default is a product of changing legal and social systems. C. Sharp changes in the economic environment, such as a deep recession.

The pecking order states that firms should:  Group of answer choices issue debt first. use internal financing first. always issue debt then the market won't know when management thinks the security is overvalued. issue new equity first.

Several factors affect a firm’s need for external funds. Evaluate the effect of each following factor and place a check next to each factor that is likely to increase a firm’s need for external capital—that is, its AFN (additional funds needed). Check all that apply. The firm increases its dividend payout ratio. The firm switches its supplier for the majority of its raw materials. The new supplier offers less favorable credit terms and thus reduces the trade credit available to the firm, resulting in a reduction in accounts payable. The firm improves its production system and increases its profit margin. Accounts payable and accrued liabilities represent obligations that the firm must pay off. Assuming everything else holds constant, if they increase, the firm’s AFN will_________    .