3. Banking and Credit Decisions Quiz

Which pronciple os essential for a sound credit decision in banking operation?

• Ignoring borrower's capital history

• Prioritizing fast disbursement

• Evaluating reapayment capacity

• Offering unsecured loans to all clients

When reviewing a borrower's application, what is a vital indicator of their financial reliability?

• Customer satisfaction score

• Record of past loan repayment

• Preferred loan team

• Duration of bank account

Which component is commonly analyzed to determine a borrower's financial standing?

• Number of dependents

• Net promotor score

• Debt to income ratio

• Employment location

Whay is a fundamental reason for maintaining thorought loan documentation?

• To enusure legal and operational transparency

• To reduce printing costs

• To attract more client

• To boost employee morale

Why do banks require proof of income during loan application?

• To advertise new loan product

• To identify customer preferences

• To offer loyalty rewards

• To assess repayment capability

In bussiness lending, which type of financing is used for daily operations and short term needs?

• Working capital loan

• Mortage

• Equipment leasing

• Venture funding

What type of loan is commonly secured by rel estate and repaid over several year?

• Credit card facility

• Mortage loan

• Trade credit

• Bridge loan

Why do banks require collectaral for some loan?

• To encourage spending

• To avoid interest rate fluctuation

• To comply with tax regulations

• To reduce lending risk in case of default

Which of the following best describes a fix interest loan?

• Interest rate changes every quarter

• Interest remains the same throughtout the loan term

• Rate is calculated based on market volatility

• Borrower chooses rate monthly

Which type of credit involves a predefined limit that the customer can reuse?

• Term loan

• Revolving cedit

• Letter of credit

• Bridge financing