Certificate in Credit T3

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Which of the following is NOT the principle of credit risk management?

When a credit officer evaluates if the borrower has the right justification and reason for applying for a facility, they are reviewing:

The borrower's reputation, integrity, and credit history are assessed under which CAMPARI element?

Which of the following is not the macro view of credit analysis?

Which of the following is correct sequence of a credit process?

In CAMPARI, the ‘C’ stands for:

Which two elements in CAMPARI closely relate to financial risk evaluation?

Credit process involves risk taking. What is the most necessary step for risk management?

Under the 5 Cs of credit, "Capacity" is one of the factors to be assessed on a potential borrower. The following assessment of capacity include:

I. Financial capacity
II. Legal capacity
III. Management capacity
IV. Industry capacity

The 'Principle of Proportionate Stake' implies that

I. Lenders must ensure that business owners must be sufficiently committed
II. The margin of financing will be less than 100%
III. Lender must ensure that its collateral arrangement position for the same borrower relative to other lenders is not worth off
IV. That credit must always be secured

The Risk Assets and Acceptance Criteria (RAAC) for consumer credit can be based on the following EXCEPT

Which of the following is true about "Collateral”?

I. The least important factor among 5 Cs
II To compensate for any weaknesses of other Cs
III. Is intended to provide lenders with more comfort
IV. Is a (second) way out, not the first way out

Lenders need to assess the sufficiency of shareholders or owners’ financial commitment in their business. Financial commitment of the shareholder/owner is often measured by the following:

I. Shareholder’s funds in the business
II. Subordinated loans to the business
III. Third party collateral provided by the owner themselves
IV. Personal net worth of the shareholder

Control is an important stage in the credit process. Why it is so?

I. To revisit borrower's risk profile
II. To ensure renewal of fire insurance, payment of sinking funds, etc done
III. To ensure facilities are operated continuously for the intended purpose
IV. To look out for any red flags

Financial commitment of shareholders as owners in their business is measured by

I. Shareholder's funds in the business
II. Subordinated loans to the business
III. Third party collateral provided by owners
IV. Shareholders/owners have positive net worth

Which of the following is/are true about accessing “Character" for consumer lending?

I. Borrower's age
II. Marital status
III. Occupations
IV. Income pattern

The 'A' in CAMPARI that assesses the borrower’s technical skills and management capabilities is:

Which of the fundamental credit risk management principles concerns with proper structuring of the facilities to ensure loans are used for intended purposes?

The concept of risk management requires credit officers to

I. Take calculated risk
II. Ask a neutral third party's opinion when encountered with marginal or complete credit
III. Identify risks that can cause the credit to be vulnerable
IV. Mitigate the identified risks, meaning that some measures have been taken either by the borrower or imposed by the lender to ensure that the risks are under control

On what basis do lenders for business credit set their R(risksisks, assets (loans) and acceptance criteria)?

I. Minimum sales
II. Profitability
III. Net worth
IV. Account profitability