Question 1

One of the 6 Cs of lending is ______________ which suggests that the lender must look at the position of the business firm in the industry and the outlook of the industry to evaluate a loan.

Accepted Answer

condition

Question 2

______________ is one of the key features of any loan.This is one of the Cs of lending that examines whether a borrower will be able to generate enough liquid assets to repay the loan.

Accepted Answer

Cash

Question 3

Smaller banks tend to emphasize on _________________ in the form of smaller denomination personal cash loans and home mortgage loans extended to individuals and families as well as smaller business loans.

Accepted Answer

retail credit

Question 4

One of the 6 Cs of lending is ______________ which suggests that a lender must ensure that the borrower is legally entitled to sign a binding loan agreement.For an individual this entails making sure the borrower is of a legal age to sign a contract.

Accepted Answer

The answer of One of the 6 Cs of lending...

Question 5

______________ loans are ones that carry a strong probability of loss to the bank.

Accepted Answer

The answer of ______________ loans are ones that carry a...

Question 6

____________________________ loans are ones that are secured by land,buildings,and other structures.These loans can be short term construction loans or longer term loans to finance the purchase of homes and apartments among others.

Accepted Answer

The answer of ____________________________ loans are ones that are secured...

Question 7

Loans that have minor weaknesses because a bank has not followed its written loan policy or which have missing documentation are called ______________ loans.

Accepted Answer

The answer of Loans that have minor weaknesses because a...

Question 8

___________________________,usually large banks,devote a bulk of their credit portfolio to large-denomination loans directed towards corporations and other businesses.

Accepted Answer

The answer of ___________________________,usually large banks,devote a bulk of their...

Question 9

________________________ are types of loans where a lender buys equipment or vehicles and rents them to its customers.

Accepted Answer

The answer of ________________________ are types of loans where a...

Question 10

____________________________ loans are ones that are extended to farmers and ranchers to assist in planting crops,harvesting crops,and to support the feeding and care of livestock.

Accepted Answer

The answer of ____________________________ loans are ones that are extended...

Question 11

When a bank purchases a whole loan or a piece of a loan from another bank,they are purchasing what is known as a ___________________________.

Accepted Answer

The answer of When a bank purchases a whole loan...

Question 12

____________________________ are certain actions that a borrower must take during a loan period.Examples include filing periodic financial statements with the bank and purchasing insurance on any collateral pledged.

Accepted Answer

The answer of ____________________________ are certain actions that a borrower...

Question 13

An approach that divides the cash flows of a firm into three principal sources,namely cash flow from operations,cash flow from financing activities,and cash flow from investing activities,is known as the _____________ cash flow method.

Accepted Answer

The answer of An approach that divides the cash flows...

Question 14

______________________ loans are those that are granted to businesses to cover purchases of inventory,paying taxes,and meeting payrolls.

Accepted Answer

The answer of ______________________ loans are those that are granted...

Question 15

A(n)______________ is the process of resolving a troubled loan so that a bank can recover its loaned funds.

Accepted Answer

The answer of A(n)______________ is the process of resolving a...

Question 16

A(n)______________ is a written contract signed by a borrower and states the principal amount of the loan,the interest rate on the loan,and the terms under which repayment must take place.

Accepted Answer

The answer of A(n)______________ is a written contract signed by...

Question 17

Credit extended to banks,insurance companies,finance companies,and other similar institutions is known as _______________.

Accepted Answer

The answer of Credit extended to banks,insurance companies,finance companies,and other...

Question 18

A bank's _____________________________________ gives its loan officers specific guidelines in making individual loan decisions and in shaping the overall loan portfolio.

Accepted Answer

The answer of A bank's _____________________________________ gives its loan officers...

Question 19

________________________ include credit to finance the purchase of automobiles,mobile homes,appliances,and other retail goods and services purchased by consumers.

Accepted Answer

The answer of ________________________ include credit to finance the purchase...

Question 20

The ______________ is a uniform rating system developed by regulators where banks are given a rating between one and five in each of the six categories and an overall rating.

Accepted Answer

The answer of The ______________ is a uniform rating system...

Quiz 16: Lending Policies and Procedures: Managing Credit Risk