The process by which banks screen potential applicants by eliminating bad risks and to obtain a pool of creditworthy borrowers is called

Question

Quizplus · Accepted Answer

Credit-risk analysis is the process by which banks screen potential applicants by assessing their creditworthiness and eliminating bad risks. This helps them to obtain a pool of borrowers who are more likely to repay their loans on time. Gap analysis is the process of analyzing the difference between a company's current performance and its desired performance to identify areas of improvement. Duration analysis is the measurement of the sensitivity of a bond's price to changes in interest rates. Liquidity analysis is the assessment of a company's ability to meet its short-term financial obligations.

The Process by Which Banks Screen Potential Applicants by Eliminating