vu fin625 Lecture No.07 - Quiz No.1
vu fin625 Credit & Risk Management Quiz
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Question 1: Which of the following risks encompasses the entire spectrum of risks arising from the economic, political and social environments of a foreign country that may have potential consequences for foreigners’ debt and equity investments in that country?
Credit or default risk
Transfer risk
Systematic risk
Country or sovereign risk
Question 2: The ways through which banks avoid association with individuals involved in fraudulent activities and other crimes include all of the following, EXCEPT:
They ask for references from known parties
They access credit registries
They keep the individuals responsible for managing a company at distance
They check their personal references and financial condition
Question 3: Which of the following risks focuses more specifically on a borrower’s capacity to obtain the foreign exchange necessary to service its cross-border debt and other contractual obligations?
Credit or default risk
Transfer risk
Country or sovereign risk
Systematic risk
Question 4: Which of the following is an important way to reduce credit risks, especially in Inter-bank transaction?
Netting agreements
Workplace agreements
Interagency agreements
Option agreements
Question 5: Loans to certain industry sectors, asset securitization, customer-written options, credit derivatives, credit-linked notes, are examples of which of the following?
Simple credit-granting activities
Complex credit-granting activities
Unchallenging credit-granting activities
Standard credit-granting activities
