
Credit Risk Assessment Analysis
Quiz
•
Others
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Professional Development
•
Hard
Enrique M
FREE Resource
12 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary purpose of credit analysis?
To assess the creditworthiness of a borrower.
To analyze market trends and forecasts.
To determine the interest rates for loans.
To evaluate the profitability of a business.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Name two key components of a credit analysis process.
Loan repayment terms
Interest rate fluctuations
Collateral requirements
Borrower's credit history, Financial statements
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What factors are considered when assessing credit risk?
Investment portfolio
Personal savings
Employment history
Factors considered when assessing credit risk include credit history, income stability, debt-to-income ratio, credit score, and economic conditions.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How does a borrower's credit history impact their credit risk?
A borrower's credit history has no effect on their credit risk.
A borrower's credit history only affects their interest rates, not their credit risk.
A borrower's credit history is irrelevant to lenders when assessing credit risk.
A borrower's credit history directly impacts their credit risk by indicating their likelihood of repaying debts based on past behavior.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What role does income stability play in credit risk evaluation?
Income stability is irrelevant to a borrower's repayment history.
Income stability reduces credit risk by indicating a borrower's ability to consistently meet repayment obligations.
Income stability has no impact on credit risk evaluation.
Higher income stability increases the likelihood of default.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Identify one external factor that can influence credit risk.
Stable housing market
Economic downturns
Increased consumer spending
High interest rates
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is risk mitigation in the context of credit assessment?
Risk mitigation involves ignoring potential credit risks altogether.
Risk mitigation refers to the assessment of creditworthiness without any strategies.
Risk mitigation in credit assessment refers to strategies used to reduce potential lending risks.
Risk mitigation is the process of increasing lending risks.
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