Question：Which type of financing arrangement would you associate with mezzanine finance?

　　A. Small business lending.

　　B. Issuing bonds.

　　C. Venture capital finance.

　　D. Leasing arrangements.

　　The correct answer is: Venture capital finance.

　　Mezzanine finance is a form of debt finance ranking below senior debt and other debt in rights to payment of interest and repayment of capital, but with some equity element in it (equity kicker). Interest on mezzanine finance is higher than on senior debt because of the higher risk. It might be used in a venture capital financing arrangement.

　　Question：The directors of Little Panda Inc are concerned that the potential of its managers is being under-utilised on the company's existing activities.

　　In order to make the most use of its resources, which of the following companies is Little Panda most likely to wish to acquire?

　　A. A company with the right customer profile.

　　B. A company making similar products operating substantially below capacity.

　　C. A company identified by stock market analysts as having significant growth potential, but currently lacking strategic and operational focus.

　　D. A company with a complementary product range.

　　The correct answer is: A company identified by stock market analysts as having significant growth potential, but currently lacking strategic and operational focus.

　　Hopefully this company should offer Little Panda's underemployed managers the chance to exercise their talents.