(1 mark Select one best option and transfer 1) Lagreement includes a) Purpose of loan h) Terms of the loan c) Repayment

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1 Mark Select One Best Option And Transfer 1 Lagreement Includes A Purpose Of Loan H Terms Of The Loan C Repayment 1 (31.44 KiB) Viewed 35 times

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(1 mark Select one best option and transfer 1) Lagreement includes a) Purpose of loan h) Terms of the loan c) Repayment schedule All of the above 2) Long-term financing is backed by ) Pledge b) Hypothecation c) Collateral d) Mortgage 3) Current liabilities include EXCEPT: a) Accounts payable b) Accrued interest c) Investments d) Short-term loan 4) The character of borrower refers to: a) The behavior of a person towards debt obligations b) Capacity to borrow funds c) Goodwill of a person d) Availability of assets against borrowing 5) Pricing of a loan DOES not include: a) Rate of interest b) Fees and other terms c) Risk consideration by the lender d) Risk tolerance of borrower 6) Five C's of credit DOES not include: a) Character b) Capital c) Capacity d) Collaboration 7) Factors affecting cashflow include: a) Change in cost structure b) Change in product pricing c) Change in capital structure d) All of the above
3) Which of the following options is NOT recorded in the Balance sheer? b) Building c) Goodwill d) Rent expenses Which statement shows the flow of cash and cash equivalents during the financial period? Statement of changes in equity b) Cash flow statement c) Balance sheet d) Income statement 10) Cash received from the sale of fixed assets are recorded under the head of: a) Other activities b) Investing activities e) Financing activities d) Operating activities 11) Net income equals to: a) Total revenues - Cost of Goods Sold b) Total revenues - Total expenses e) Operating revenues - Operating expenses d) Revenues - Expenses + Income Taxes 12) Other income includes EXCEPT a) Rental income b) Dividend income c) Net income d) Interest income 13) Consolidated financial statements report the financials of: a) Parent company b) Individual company c) Public company d) Private company 14) Floating rate mortgages permit lenders to charge a) Constant interest rate b) Floating interest rate c) Increase the interest rate in phases d) The decreased interest rate in phases 15) In an amortization schedule, interest expenses over time a) Decrease b) Increase c) Constant d) Unchanged
PART II: SUBJECTIVE Q1: How does the bank use five C's of credit to mitigate the default risk. Explain any two elements of five C's. (5 marks)
Student ID: Q.2: A person applied for a loan from the bank. Following are the details of the borrower. Borrower has saving account only, lives with his parents, working with a company for more than 10 years and have all reference good. Calculate the credit score of the borrower as per following table: (5 marks) Points Details of Client Saving and current account Current account only Saving account only None 40 35 35 10 Resident Status: Own building Rented Living with parents Others 35 15 20 07 30 27 14 12 30 -3 Tenure with Current Employer: 15 years and above 12 to 15 years 3 to 15 years 1 month to 3 years Student Retired Unemployed Credit Report: All references good Two references good No reference 25 28 0