vuZs

Virtual University: Study Resource Bank

You are here: Home MCQs FIN625 (BNK625): Credit & Risk Management MCQs FIN625-MCQ Solved with Ref-Mehreen Humayun-05
Like this Page? Press  
 

Virtual University MCQs BANK - MCQs Collection from Online Quizzes

FIN625-MCQ Solved with Ref-Mehreen Humayun-05

Credit Analysis & Risk Management

FIN625-Quiz#03

Lesson 01-23

Shared & solved by Mehreen Humayun

www.vuzs.net

This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

 

 

 

 

 

 

 

Question # 1 of 15  

What will be the credit conversion factor for commitments with original maturity over one year as proposed in the June 1999 Consultative Paper?

 

Continue to be 60%

Continue to be 50%

Continue to be 40%

Continue to be 30%

LECTURE – 22

The credit conversion factor for commitments with original maturity over one year will continue to be 50%.

 

Question # 2 of 15

All of the following are the examples of personal collateral, EXCEPT:

 

Surety ship

Guarantee and letter of support

Collateral promise

Non-mutual collateral

LECTURE – 18

Examples of personal collateral are the following:

a. surety ship

b. guarantee and letter of support

c. collateral promise

Question # 3 of 15

How many process components are there in the credit review?

 

One

Two

Three

Four

LECTURE – 17

The credit review basically consists of two process components:

1. Standardized models of data evaluation

2. Documentation and evaluation of other credit assessment factors

 

Question # 4 of 15

Which of the following, for groups of companies, should be designed in a manner, specific to the risk involved, efficient and should aim to focus the review on actual risk-bearer?

 

Credit score

Credit approval

Credit history

Credit administration

LECTURE – 14

Credit approval for groups of companies should be designed in a manner which is specific to the risk involved and efficient and should aim to focus the review on the actual risk-bearer, that (natural or legal) person whose legal and economic situation ultimately determines the ability to fulfill the obligations under the credit agreement.

 

Question # 5 of 15

Which of the following policies reward unacceptable behavior such as generating short-term profits while deviating from credit policies or exceeding established limits, weaken the bank's credit processes?

 

Constituent policies

Remuneration policies

Distributive policies

LECTURE – 06

Remuneration policies that reward unacceptable behavior such as generating short-term profits while deviating from credit policies or exceeding established limits, weaken the bank's credit processes.

www.vuzs.net

This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

Question # 6 of 15

How many approaches do Basel II provide to determine the capital requirement?

 

Five

Four

Three

Two

LECTURE – 14

Basel II provides two approaches to determine the capital requirement:

1. A standardized approach and

2. An internal ratings-based approach (IRB approach).

 

Question # 7 of 15

Which of the following is the one way for a bank to deal with credit risk?

 

Charge all borrowers from the same industry an average rate or interest for that industry

Avoid making loans to borrowers from a broad spectrum and to specialize geographically and in specific industries

Add a mark-up to the cost of funds for a specific borrower based on the borrower's credit history

All loans within the conforming loan limit at the time of origination will continue to be deemed

Ref:

All loans that were within the conforming loan limit at the time of origination will continue to be deemed within the conforming loan limit during the remaining lives of such loans, regardless of whether the loan limit for any subsequent year declines to a level below the limit at the time of origination.

 

Question # 8 of 15

Which of the following is a critical element in maintaining the safety and soundness of a bank?

 

Credit authority

Credit report

Credit administration

Credit score

LECTURE – 09

Credit administration is a critical element in maintaining the safety and soundness of a bank.

www.vuzs.net

This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

 

Question # 9 of 15

Claims on individuals belong to which of the following portfolios?

Select correct option:

Investment

Retail

Project

Market

LECTURE – 14

Claims on individuals belong to the retail portfolio.

 

Question # 10 of 15

All of the following are the activities covered in a credit history or credit report, EXCEPT:

 

Consumer’s payment patterns

Consumer’s lending patterns

Consumer’s credit balances

Consumer’s credit inquiries by debtors

The activities covered in a credit history or credit report include, but are not limited to, a consumer’s payment patterns, borrowing patterns, and credit balances, as well as credit inquiries by potential creditors.       

Question # 11 of 15

The strong legal position resulting from which of the following collateral, may warrant special treatment of the relevant forms of finance?

 

Equity and leasing finance

Mortgage and equity finance

Mortgage and leasing finance

Venture capital and equity finance

LECTURE – 13

Mortgage finance and leasing are those forms of finance which often give the lender a substantial degree of control over the asset being financed. The strong legal position resulting from such collateral may warrant special treatment of the relevant forms of finance.

 

Question # 12 of 15

All of the following are synonyms for adverse credit history, EXCEPT:

 

Poor credit history

Non-status credit history

Impaired credit history

First-rate credit history

LECTURE – 03

Adverse credit history also called sub-prime credit history, non-status credit history, impaired credit history, poor credit history, and bad credit history, is a negative credit rating.

 

Question # 13 of 15 ( Start time: 02:08:23 PM ) Total M - 1

Which of the following terms is also called credit history or credit score?

 

Credit reputation

Credit risk

Credit repair

Credit union

LECTURE – 03

The term "credit reputation" can either be used synonymous to credit history or to credit score.

Question # 14 of 15

Which of the following is referred to as knockout criteria?

 

Yellow criteria

Red criteria

Green criteria

Black criteria

LECTURE – 16

Red criteria, which, if fulfilled, lead to an outright rejection of the exposure (also referred to as knock-out criteria).

 

Question # 15 of 15

The organizational structure of risk analysis is usually based on a five-level organizational model. Which of the following is NOT a level in this model?

 

Division manager

Associates

Group leader

Specialists

Ref:

The organizational structure of risk analysis is usually based on a five-level organizational model 60

Level 1 executive (chief risk officer)

Level 2 division manager

Level 3 head of department (HD)

Level 4 group leader (GL)

Level 5 specialists Risk.

 

 

www.vuzs.net

This e-mail address is being protected from spambots. You need JavaScript enabled to view it.

 

 

 

Add comment


Security code
Refresh

You are here: Home MCQs FIN625 (BNK625): Credit & Risk Management MCQs FIN625-MCQ Solved with Ref-Mehreen Humayun-05