MC Questions

Question 1

What are typical causes for project failure?

a) financial failure of contractor
b) poor management
c) capital cost overrun
d) government interference
e) early completion

Answer 1

a)
b)
c)
d)

Question 2

What is the role of a sponsor in a take-or-pay contract?

a) enters a take-or-pay contract with lenders or lessors
b) makes take-or-pay contract payments to trustee
c) pays excess CF to the PC
d) receives excess CF from the trustee
e) non of the above

Answer 2

b)

Question 3

What are advantages of PPP from the perspective of the pubic administration/ government?

a) faster and cheaper project completion and operation due to higher efficiency of specialized private companies
b) relief of stressed public budget
c) government becomes more dependent from private sector
d) exploiting of new, profitable business fields
e) none of the above

Answer 3

a)

b)

Question 4

What do the EuroDisney Project, the EuroTunnel project and Hamburg’s Elbphilharmonie project have in common?

a) assets of same SPV
b) faced with enormous FX risks during construction phase
c) all projects ran into distress
d) all projects were completely financed without loan syndication
e) none of the above

Answer 4

c)

Question 5

What are key features of project finance deals?

a) full recourse financing
b) Cash-Flow-related-lending
c) on-balance-sheet-financing
d) explicit risk-sharing
e) off-balance-sheet-financing

Answer 5

b)
d)
e)

Question 6

What is correct regarding tranching? the better the rating grade of the tranche…

a) the higher the order (=earlier) or cash flow allocations
b) the more similar to equity a tranche becomes
c) the higher the risk of not receiving cash flows (=taking losses)
d) the lower the expected yield of the tranche
e) the higher the expected yield of the tranche

Answer 6

a)

d)

Question 7

What is an appropriate leverage (debt-to-equity-ratio) for a merchant power plant project with no off-take contract or price hedging?

a) 90:10
b) 85:15
c) 80:20
d) 50:50
e) 20:80

Answer 7

d)

Question 8

What four types of sponsors are very often involved in project finance deals?

a) Private/ Retail sponsors
b) Industrial sponsors
c) Public sponsors
d) Contractors
e) Purely financial investors (non-retail)

Answer 8

b)
c)
d)
e)