Which of the following is not likely cause of Default? Select one: a.Lack of compliance with loan policies b.Inadequate controls over loan officers c.Over concentration of bank lending in certain sectors or areas d.Lending in familiar markets e.All of the above

Banks may deny creditworthy borrowers loan requests if a. they are non-corporate entities b. they are on late on paying taxes c. the loan is too risky d. they are individuals

QUESTION 1 Which if the following is not true of the 5Cs in evaluating credit quality     Character refers to the integrity and honesty of the borrower and applies to both individuals and companies     Capital refers to the savings or wealth of the borrower as an additional source of income to repay the loan     Collateral refers to assets that are pledged to lender     Capacity refer to external factors including the state of economy  that can impact the borrower’s source of income.     QUESTION 2 Which of the following is not true?                                   Firm A                                      Firm B                          Industry Benchmark   2018 2019 2020 2018 2019 2020 2018 2019 2020 ROA 9.14% 9.50% 9.90% 8.11% 8.16% 8.19% 8.11% 8.14% 8.15% ROE 22.45% 22.95% 23.45% 19.65% 19.88% 20.12% 19.95% 20.55% 21.00% TIE 1.75 1.65 1.55 2.75 2.90 3.05 2.25 2.30 2.50 CR 3.25 3.66 3.75 2.55 2.65 2.75 2.40 1.45 2.50 EPS…

Which of the following is NOT a criterion for evaluating bank liquidity used by regulators?a. availability of assets readily converted into cashb. the diversity of the bank's money market assetsc. the bank's formal and informal commitments for future lending or investmentsd. structure and volatility of deposits All of the following are common ratio measures of bank liquidity EXCEPT:a. loans/depositsb. loans/nondeposit liabilitiesc. unencumbered liquid assets/nondeposit liabilitiesd fixed assets/loans The quantity of deposit and nondeposit funds in a bank depends on all of the following EXCEPT:a. the Fed's monetary policy actionsb. the bank's financial strengthc. economic conditionsd. none of the above

All of the following are purposes of internal risk rating systems except: Group of answer choices D. Pricing and trading of loans. B. Setting of limits and acceptance or rejection of new transactions. C. Inadequacy of loan reserves. A. Monitoring of credit quality.

When a lender refuses to make a loan, although borrowers are willing to pay the stated interest rate or even a higher rate, the bank is said to engage in strategic holding out. collusive behavior. coercive bargaining. credit rationing.

1) If borrowers with the most risky investment projects seek bank loans in higher proportion to those borrowers with the safest investment projects, banks are said to face the problem of A) adverse credit risk. B) adverse selection. C) moral hazard. D) lemon lenders.

Ee 54.

How does a lower credit rating affect borrowers lenders and financial institution? What are the implications of the downgrade on the health of the financial system?

All of the following may be considered causes of the “dark side” of credit except: Group of answer choices B. Operational issues that affect credit assessments can have a systematic effect on the whole consumer portfolio. D. Historical data tends to be consistent and can lead to accurate forecasts. A. Tendency of consumers to default is a product of changing legal and social systems. C. Sharp changes in the economic environment, such as a deep recession.