Retail Lending Certification Quiz 4

What is one method to verify a borrower's financial information?

• Interview with local authorities

• Review of social media

• Online surveys

• Email correspondence

What should a loan officer do if they suspect a borrower's sales volume is too high?

• Ignore the claim

• Request more sales invoices

• Check with the borrower's customer

• Increase the loan amount

Which of the following is NOT a method of verifying through observation?

• Peer comparison

• Customer interviews

• Site visit

• Financial metrics

If a business's gross income drops from 20% to 15%, what could be a contributing factor?

• Increased competition

• Improved marketing strategies

• Higher product prices

• Lower demand for products

What does the 'R' in the REALTOR framework stand for?

• Right

• Return

• Risk

• Revenue

What is a potential risk associated with collateral evaluation?

• Ownership verification

• High market demand

• Property type consistency

• Geological safety

What is the significance of the 'Value' in the VRIN framework?

• It evaluates if resources add value

• It determines if resources can be imitated

• It assesses the rarity of resources

• It checks for substitutability

How should a loan officer respond to a borrower with seasonal income?

• Deny the loan

• Align repayment modes with cash flow

• Offer a fixed repayment schedule

• Ignore income variability

What should be collected to verify a borrower's repayment capacity?

• Sales Projections

• Repayment Schedule, Bank Statement and Repayment Receipt

• Business Plan

• Market Analysis

What is a sign of potential financial trouble in a borrower's borrowing history?

• Stable income levels

• Multiple loans with good repayment records

• Frequent borrowing from different institutions

• Consistent loan amounts