BBP QUIZ

Which of the following is NOT a type of banking risk?

• Credit Risk

• Market Risk

• Operational Risk

• Employment Risk

What is Asset Liability Management (ALM)?

• A strategy to manage a company's inventory

• A practice to ensure that financial institutions manage their assets and liabilities effectively

• A technique for stock market investment

• A method to manage employee turnover

Which of the following is an example of a liability for a bank?

• Mortgage loans

• Customer deposits

• Equity investments

• Real estate holdings

What is the primary role of a loan underwriter?

• To advertise loan products

• To evaluate and assess the risk of lending money to applicants

• To process loan repayments

• To manage the bank's investments

Which of the following factors do loan underwriters typically assess when evaluating a loan application?

• Applicant's employment history

• Current market trends

• Applicant's credit score

• Bank's investments

What type of loans do loan underwriters typically review?

• Mortgage loans

• Auto loans

• Personal loans

• All of the above

What is 'collateral' in the context of loan underwriting?

• The applicant's credit history

• An asset pledged by the borrower to secure the loan

• The interest rate on the loan

• The term of the loan

What is the purpose of an appraisal in the loan underwriting process?

• To determine the value of the collateral securing the loan

• To assess the applicant's creditworthiness

• To verify the applicant's employment status

• To calculate the applicant's debt-to-income ratio

Which of the following is a primary goal of ALM?

• Maximizing shareholder wealth

• Ensuring liquidity and mitigating risks due to interest rate fluctuations

• Increasing market share

• Reducing operational costs

Why is it important for banks to manage their interest rate risk?

• To increase customer satisfaction

• To ensure steady profitability despite fluctuations in interest rates

• To reduce marketing expenses

• To comply with regulatory requirements