Podcast
Questions and Answers
What is the primary consideration for determining the maturity of a loan?
What is the primary consideration for determining the maturity of a loan?
- Type of collateral provided
- Borrower's credit history
- Duration of the financing needed (correct)
- Interest rate offered
What is the primary purpose of requiring collateral in lending?
What is the primary purpose of requiring collateral in lending?
- To improve the lender's liquidity
- To reduce the risk of lending (correct)
- To enhance the borrower's credit score
- To increase the interest rate
What is a key factor to consider when establishing an interest rate?
What is a key factor to consider when establishing an interest rate?
- Lender's reputation
- Borrower's age
- Type of loan
- Cost of funds (correct)
What is the primary consequence of failing to repay a loan on time?
What is the primary consequence of failing to repay a loan on time?
What is the primary component of the 'five Cs of credit' that refers to a borrower's payment habits?
What is the primary component of the 'five Cs of credit' that refers to a borrower's payment habits?
What is the purpose of the 'five Cs of credit' in lending?
What is the purpose of the 'five Cs of credit' in lending?
What is the primary responsibility of bankers in assessing credit risk?
What is the primary responsibility of bankers in assessing credit risk?
What led to the relaxation of credit standards in the lending industry?
What led to the relaxation of credit standards in the lending industry?
What is the term for the phenomenon where lenders prioritize winning deals over prudent risk assessment?
What is the term for the phenomenon where lenders prioritize winning deals over prudent risk assessment?
What is the primary focus of a banker's attention in a competitive lending environment?
What is the primary focus of a banker's attention in a competitive lending environment?
What is the consequence of a lender's decision to relax credit standards to win business?
What is the consequence of a lender's decision to relax credit standards to win business?
What is the significance of collateralization in credit risk management?
What is the significance of collateralization in credit risk management?
What is a potential consequence of liberal credit during a period of economic prosperity?
What is a potential consequence of liberal credit during a period of economic prosperity?
What type of loan is repayable upon demand or has an indefinite maturity date?
What type of loan is repayable upon demand or has an indefinite maturity date?
What is the primary source of repayment for a self-liquidating loan?
What is the primary source of repayment for a self-liquidating loan?
What type of credit is granted by government institutions?
What type of credit is granted by government institutions?
What is the primary characteristic of a long-term loan?
What is the primary characteristic of a long-term loan?
What is a potential risk associated with collateralized loans?
What is a potential risk associated with collateralized loans?
