Fixed Income Q112
0. Which of the following industries is most likely to have the greatest risk?
- Option : A
- Explanation : The airline industry relies upon a few aircraft manufacturers; therefore the bargaining power of suppliers is great making this a risky industry. The beverage industry relying upon a huge customer base has a regular stream of cash flows and the negotiating power does not lie with the customers. Therefore this is less risky. The pharmaceutical industry having high entry barriers is less risky because the competition is not fierce and pricing power is significant.
