Question 1

Asset-based lending is typically used to finance

Accepted Answer

A)  real estate. 
B)  construction and development projects. 
C)  accounts payable 
D)  accounts receivable 
A)  real estate. 
B)  construction and development projects. 
C)  accounts payable 
D)  accounts receivable

Question 2

Covenants in loan agreements are used to

Accepted Answer

A)  secure collateral 
B)  make representations in agreements 
C)  control the borrower's behavior 
D)  as guaranties 
A)  secure collateral 
B)  make representations in agreements 
C)  control the borrower's behavior 
D)  as guaranties

Question 3

Another name for floor planning is

Accepted Answer

A)  warehouse receipt 
B)  trust receipt 
C)  banker's acceptance 
D)  field warehouse 
A)  warehouse receipt 
B)  trust receipt 
C)  banker's acceptance 
D)  field warehouse

Question 4

Anything can be used as collateral, as long as it is legal.

Accepted Answer

A) True 
 B)False

Question 5

Revolving loans are generally used for

Accepted Answer

A)  financing rolling stock. 
B)  financing working capital (inventories, accounts receivable, etc.) 
C)  financing plant expansions. 
D)  permanent financing. 
A)  financing rolling stock. 
B)  financing working capital (inventories, accounts receivable, etc.) 
C)  financing plant expansions. 
D)  permanent financing.

Question 6

The prime rate is

Accepted Answer

A)  the base rate on consumer loans 
B)  the base rate on international loans 
C)  the base rate conventional loans 
D)  none of the above 
A)  the base rate on consumer loans 
B)  the base rate on international loans 
C)  the base rate conventional loans 
D)  none of the above

Question 7

Relationship pricing is based on the total banking relationship between the customer and the bank.

Accepted Answer

A) True 
 B)False

Question 8

A bank's board of directors is responsible to providing guidance in the form of written instructions to loan officers as to the types of loans they should make.

Accepted Answer

A) True 
 B)False

Question 9

Loan participations are

Accepted Answer

A)  parts of loans that are sold to banks 
B)  parts of securitized investments 
C)  participation in the underwriting 
D)  downstream investment 
A)  parts of loans that are sold to banks 
B)  parts of securitized investments 
C)  participation in the underwriting 
D)  downstream investment

Question 10

Collateral reduces the risk of a loan per se.

Accepted Answer

A) True 
 B)False

Question 11

Character refers to a person's honesty and willingness to repay debts.

Accepted Answer

A) True 
 B)False

Question 12

A Bankers' Acceptance is most commonly used in connection with

Accepted Answer

A)  financing foreign trade 
B)  financing inventories 
C)  financing securities 
D)  financing trust accounts 
A)  financing foreign trade 
B)  financing inventories 
C)  financing securities 
D)  financing trust accounts

Question 13

Collateral is the most important of the 6 Cs of credit.

Accepted Answer

A) True 
 B)False

Question 14

The term "securitization" refers to:

Accepted Answer

A)  investing in short-term securities 
B)  investing in long-term securities 
C)  packaging and selling large loans 
D)  packaging and selling of otherwise unmarketable loans 
A)  investing in short-term securities 
B)  investing in long-term securities 
C)  packaging and selling large loans 
D)  packaging and selling of otherwise unmarketable loans

Question 15

The effective yield on the loan is the least when the loan is priced at

Accepted Answer

A)  nominal rates/365 days 
B)  360-day year/30-day months 
C)  360-day year/actual number of days 
D)  365-days/actual number of days 
A)  nominal rates/365 days 
B)  360-day year/30-day months 
C)  360-day year/actual number of days 
D)  365-days/actual number of days

Question 16

Asset based lenders tend to pay more attention to __________ of an asset than banks.

Accepted Answer

A)  book value 
B)  market value. 
C)  restrictive covenants. 
D)  overdrafts. 
A)  book value 
B)  market value. 
C)  restrictive covenants. 
D)  overdrafts.

Question 17

Banks, knowing about asymmetric information, rely exclusively on information from prospective customers when evaluating loan requests.

Accepted Answer

A) True 
 B)False

Question 18

Compliance refers to a person's honesty and willingness to pay debts.

Accepted Answer

A) True 
 B)False

Question 19

Banks may deny creditworthy borrowers loan requests if

Accepted Answer

A)  they are black or oriental 
B)  they are single females 
C)  they are on public assistance 
D)  the loan is too risky 
A)  they are black or oriental 
B)  they are single females 
C)  they are on public assistance 
D)  the loan is too risky

Question 20

The outstanding amount of a term loan should always be

Accepted Answer

A)  less than the value of the asset being financed 
B)  equal to the borrower's equity. 
C)  equal to the value of the collateral. 
D)  equal to the net present value of the cash flows from the asset being financed. 
A)  less than the value of the asset being financed 
B)  equal to the borrower's equity. 
C)  equal to the value of the collateral. 
D)  equal to the net present value of the cash flows from the asset being financed.

Asset-based lending is typically used to finance

Covenants in loan agreements are used to

Another name for floor planning is

Anything can be used as collateral, as long as it is legal.

Revolving loans are generally used for

The prime rate is

Relationship pricing is based on the total banking relationship between the customer and the bank.

A bank's board of directors is responsible to providing guidance in the form of written instructions to loan officers as to the types of loans they should make.

Loan participations are

Collateral reduces the risk of a loan per se.

Character refers to a person's honesty and willingness to repay debts.

A Bankers' Acceptance is most commonly used in connection with

Collateral is the most important of the 6 Cs of credit.

The term "securitization" refers to:

The effective yield on the loan is the least when the loan is priced at

Asset based lenders tend to pay more attention to __________ of an asset than banks.

Banks, knowing about asymmetric information, rely exclusively on information from prospective customers when evaluating loan requests.

Compliance refers to a person's honesty and willingness to pay debts.

Banks may deny creditworthy borrowers loan requests if

The outstanding amount of a term loan should always be

Functions and Forms of Banking

The Bank Regulatory Environment

Evaluating Bank Performance

Bank Valuation

An Overview of Assetliability Management Alm

Techniques of Assetliability Management: Futures, Options, and Swaps

Investment Management

Credit Evaluation Process

Real Estate and Consumer Lending

Liquidity Management

Capital Management

Managing Liabilities

Off-Balance Sheet Activities

Securities, Investment Insurance Products

Other Financial Services

Electronic Banking

Global Financial Services

Filters

Exam 9: Commercial and Industrial Lending

Asset-based lending is typically used to finance

Covenants in loan agreements are used to

Another name for floor planning is

Anything can be used as collateral, as long as it is legal.

Revolving loans are generally used for

The prime rate is

Relationship pricing is based on the total banking relationship between the customer and the bank.

A bank's board of directors is responsible to providing guidance in the form of written instructions to loan officers as to the types of loans they should make.

Loan participations are

Collateral reduces the risk of a loan per se.

Character refers to a person's honesty and willingness to repay debts.

A Bankers' Acceptance is most commonly used in connection with

Collateral is the most important of the 6 Cs of credit.

The term "securitization" refers to:

The effective yield on the loan is the least when the loan is priced at

Asset based lenders tend to pay more attention to __________ of an asset than banks.

Banks, knowing about asymmetric information, rely exclusively on information from prospective customers when evaluating loan requests.

Compliance refers to a person's honesty and willingness to pay debts.

Banks may deny creditworthy borrowers loan requests if

The outstanding amount of a term loan should always be

Functions and Forms of Banking

The Bank Regulatory Environment

Evaluating Bank Performance

Bank Valuation

An Overview of Assetliability Management Alm

Techniques of Assetliability Management: Futures, Options, and Swaps

Investment Management

Credit Evaluation Process

Real Estate and Consumer Lending

Liquidity Management

Capital Management

Managing Liabilities

Off-Balance Sheet Activities

Securities, Investment Insurance Products

Other Financial Services

Electronic Banking

Global Financial Services

Filters