FIN368 QUIZ (CHAPTER 3 : CREDIT ANALYSIS)

A process of determining the applicants' creditworthiness and forecasting their future development. This statement refers to

• A main part of loan processing

• The definition of credit analysis

What is the purpose of credit analysis?

i. Give the best loan to customer according to their needs

ii. Ensure compliance with regulations and bank policy

iii. Keep the goodwill (value) of the customer

iv. Ensure the level of risk is acceptable

• i and iii

• i, ii and iv

• All of the above

Loan structure includes the period of loan and collection

• True

• False

Types of analysis include facts analysis, qualitative analysis and quantitative analysis

• True

• False

Quantitative analysis will involve

i. Earning capacity

ii. Financial position

iii. Nature of product

iv. Liquidity position

• i, ii and iii

• ii, iii and iv

• i, ii and iv

• All of the above

Track record (past performance) of borrower and shareholder & directors represents

• Quantitative analysis

• Facts analysis

• Qualitative analysis

There are seven (7) steps in credit analysis

• True

• False

The lender will accumulate information about loan amount needed, purpose of the loan and sources for its repayment.

• Assessing the credit risk

• Collecting and analyzing information about the loan applicant

• Taking a decision

• Collecting and analyzing information about the credit event

Check the reliability of the information that provided by the loan applicant based on

i. Cross Checks

ii. CCRIS

iii. CTOS

iv. Credit Bureau

• i, ii and iii

• ii, iii and iv

• i, iii and iv

• All of the above

Analysis of the credit risk is prepared based on the reliability of the loan applicant, general economic risk and also forecasts of future development.

• True

• False