A credit applicant's ________ is his or her financial strength as reflected by his or her debt relative to equity.

Question

Quizplus · Accepted Answer

The credit applicant's financial strength as reflected by his or her debt relative to equity is called his or her capital. Option A, character, refers to the applicant's trustworthiness or reputation. Option B, capacity, refers to the applicant's ability to repay the loan. Option D, collateral, refers to assets that the applicant pledges to secure the loan.

A Credit Applicant's ________ Is His or Her Financial Strength