FINANCE COMPANY

Consumer lending through installment loans falls under which financial company activity?

• Capital mobilization.

• Guarantee operations.

• Lending operations.

• Investment.

Answer explanation

Consumer lending through installment loans is classified as lending operations, as it involves providing funds to consumers that they repay over time, distinguishing it from capital mobilization, guarantee operations, or investment.

Financial companies can participate in which of the following activities?

• Saving deposits.

• Participating in the foreign exchange market.

• Real estate business.

• Issuing currency.

Answer explanation

Financial companies can participate in the foreign exchange market, which involves trading currencies. They do not typically handle saving deposits, engage in real estate business, or issue currency.

What is one benefit of borrowing from a financial company?

• No collateral required.

• Long approval process.

• Complicated procedures

• Lower interest rates than banks.

Answer explanation

One benefit of borrowing from a financial company is that no collateral is required, making it easier for borrowers to access funds without risking their assets.

Which of the following is a risk when borrowing from a financial company?

• Simple procedures.

• High-interest rates for customers with poor credit scores.

• No need for collateral.

• Fast disbursement.

Answer explanation

High-interest rates for customers with poor credit scores pose a significant risk when borrowing from a financial company, as they can lead to higher repayment amounts and financial strain.

Financial companies do not engage in which of the following activities?

• Investing in the gold market.

• Consumer lending.

• Providing pawn services.

• Issuing currency.

Answer explanation

Financial companies typically do not invest directly in the gold market, as their primary focus is on lending, currency issuance, and other financial services. Thus, the correct answer is investing in the gold market.

What is the main advantage of financial companies affiliated with credit institutions?

• They operate completely independently, without being bound by the parent bank.

• They can flexibly raise capital from various sources without control.

• They are backed by large, reputable credit institutions with extensive networks.

• They are not affected if the parent bank faces financial or reputational difficulties.

Answer explanation

The main advantage is that they are backed by large, reputable credit institutions, which provides credibility and access to extensive networks, enhancing their ability to operate effectively in the financial market.

What is the biggest challenge that 100% foreign-owned financial companies often face in Vietnam?

• They cannot apply financial technology (Fintech) to their operations.

• They must strictly comply with Vietnam's legal regulations, making expansion difficult.

• They lack sufficient capital to compete with domestic financial companies.

• They cannot reach young, modern customers with high consumption needs.

Answer explanation

The biggest challenge for 100% foreign-owned financial companies in Vietnam is the strict compliance with local legal regulations, which complicates their ability to expand and adapt to the market.

What is the main limitation of state-owned financial companies compared to other types?

• They do not have stable capital sources to implement large projects.

• They lack motivation for innovation and creativity due to the absence of market pressure.

• They cannot access government support policies.

• They do not have an advantage in long-term economic development projects.

Answer explanation

State-owned financial companies often lack market pressure, which diminishes their motivation for innovation and creativity. Unlike private firms, they may not feel the same urgency to adapt and improve, limiting their effectiveness.

Why do joint-stock financial companies have strong long-term growth potential?

• They operate under direct government sponsorship.

• They have flexible capital mobilization and adaptability to market trends.

• They are not subject to competition from other types of financial companies.

• They are unaffected by stock market fluctuations.

Answer explanation

Joint-stock financial companies have strong long-term growth potential because they can mobilize capital flexibly and adapt to market trends, allowing them to respond effectively to changing economic conditions.

What is the biggest risk that joint-venture financial companies may face?

• Conflicts between partners over business strategy and control.

• Inability to access capital from both domestic and foreign sources.

• Inability to expand into international markets despite foreign partner support.

• Prohibition from applying financial technology to their operations.

Answer explanation

The biggest risk for joint-venture financial companies is conflicts between partners over business strategy and control, which can lead to inefficiencies and hinder decision-making.