Which of the following is the strongest indication of a bust-out?
a. The company has one permanent residential street address.
b. Management suddenly changes without public notice.
c. Inventory suddenly and dramatically increases.
d. One of the credit references is an out-of-town bank.
b
FEEDBACK: a. Incorrect. This implies a real address, not a post office box.
b. Correct. This is a very strong sign.
c. Incorrect. Bust-outs are characterized by disappearing inventory.
d. Incorrect.
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