This quiz works best with JavaScript enabled. Home > Risk Management > Credit Risk Management – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Credit Risk Management Quiz 3 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. PT. Lima Karya Mandiri received a bridge construction project in Pariaman City. Ybs submitted an application for KMKK credit to the Pariaman Branch Office with a ceiling of IDR 1, 500, 000, 000 (one billion five hundred million rupiah). The Pariaman Branch Office's Productive NPL in December 2020 was 15.05% and the NPL in the construction sector was 14.67%. The limit of authority to make decisions at the Pariaman Branch Office is IDR 2, 000, 000, 000 (two billion rupiah). Do customers need credit approval from PT. Five Karya Mandiri received Credit Risk Assessment? A) No need for a risk study. B) Requires a risk assessment. Show Answer Correct Answer: A) No need for a risk study. 2. Large loans are often disbursed by banks and transferred directly to the beneficiary's (supplier) account to achieve which of the following control objectives? A) To control loan purposes. B) To save withdrawal time. C) To ensure the beneficiary will receive the money. D) To reduce costs for the borrower. Show Answer Correct Answer: A) To control loan purposes. 3. Which of the following credit handling measures belongs to the group of risk loss mitigation measures? A) Use technology to support appraisal analysis. B) Full credit risk provisioning. C) Refuse to lend to high-risk loans and customers. D) Building a macro factor analysis system. Show Answer Correct Answer: B) Full credit risk provisioning. 4. Which among the following is not a Domestic Credit Rating Agency in India? A) Standard and Poor's. B) Brickwork Ratings. C) CRISIL Ltd. D) ICRA Ltd. Show Answer Correct Answer: A) Standard and Poor's. 5. Which of the following tools is not used in controlling credit portfolio risk of commercial banks? A) Debt trading. B) Credit default swap. C) Interest rate swap. D) Debt securitization. Show Answer Correct Answer: C) Interest rate swap. 6. What is the tool that used to monitor the quality of credit? A) Independent portfolio system. B) Internal risk rating system. C) Stress analysis. D) External risk rating system. Show Answer Correct Answer: B) Internal risk rating system. 7. Product approval or evaluation program should not take into account on the following risks A) Audit and internal control. B) Legal risk. C) Liquidity risk. D) Operational risk. Show Answer Correct Answer: D) Operational risk. 8. The quality of Bank A's asset portfolio decreased due to increased risk of non-repayment of loans. A) It is possible lender to renew or grant new loans. B) May threaten solvency. C) All right. D) None of above. Show Answer Correct Answer: C) All right. 9. In managing good credit, banks need to build a good credit culture, including professionalism and integrity of officials, which is not included in the statement of credit culture. A) Prioritize quality, not quantity, in providing credit. B) Achieve quality business relationships. C) Comprehensive credit risk identification and mitigation. D) Comply with policies and rules, both internal and external (compliance). E) Prioritize the quantity of credit given to achieve KPI. Show Answer Correct Answer: E) Prioritize the quantity of credit given to achieve KPI. 10. Capital mentioned in the Balance Sheet of a company can be verified from ..... A) Chartered Accountant. B) Company. C) Balance Sheet available with Registrar of companies. D) None of the above. Show Answer Correct Answer: C) Balance Sheet available with Registrar of companies. 11. The Payakumbuh Branch Office is processing Harun Zen's credit with a ceiling of IDR 1, 200, 000, 000 (one billion two hundred million rupiah) which will be used for cattle trading. The Productive NPL Condition of the Payakumbuh Branch Office in December 2020 was 16.83% and the NPL in the trade sector was 17.95%. The limit of authority to decide on the Payakumbuh Branch office is IDR 3, 000, 000, 000 (three billion rupiah). Does the Payakumbuh Branch Office have to request a Risk Assessment from the Risk Management Division regarding the customer's credit application? A) A risk assessment needs to be requested. B) There is no need to request a risk assessment. Show Answer Correct Answer: A) A risk assessment needs to be requested. 12. Who is required to do the compliance of KYC Norms? A) Appraising authority. B) Sanctioning authority. C) RBO. D) LHO. Show Answer Correct Answer: A) Appraising authority. 13. What content is mentioned in the bank's credit policy? A) The proportion of credit in a bank's total assets. B) Credit sector. C) Both of the above ideas are correct. D) Both of the above ideas are wrong. Show Answer Correct Answer: C) Both of the above ideas are correct. 14. Which among the following is not a Credit Risk Mitigant? A) ECGC Guarantee. B) Insurance of Assets. C) Collaterals. D) Pricing of Loan assets. Show Answer Correct Answer: D) Pricing of Loan assets. 15. Stages of pre sanction credit process are A) Assessment and sanction. B) KYC and appraisal. C) Appraisal, Assessment and Sanction. D) Only Appraisal. Show Answer Correct Answer: C) Appraisal, Assessment and Sanction. 16. Under Projected Annual Turnover (PAT) method as per Nayak Committee recommendations, minimum contribution from the promoters or Net Working Capital must be equal to? A) 5% of the Projected Annual Turnover. B) 5% of the total requirement. C) 5% of the Total Current Assets. D) 25% of the Projected Annual Turnover. Show Answer Correct Answer: A) 5% of the Projected Annual Turnover. 17. The minimum Net Working Capital under Projected Balance Sheet method should be? A) 25% of the total current assets. B) No minimum requirement, to be decided on case to case basis considering other parameters. C) 25% of the limit sought by the customer. D) 25% of the projected turnover. Show Answer Correct Answer: B) No minimum requirement, to be decided on case to case basis considering other parameters. 18. Which of the following statements is not related to concentration risk on commercial banks' credit portfolios? A) The ratio of using short-term resources for medium and long-term loans is no more than 30%. B) The outstanding credit balance of a single borrower must not exceed 15% of the bank's equity capital. C) The outstanding loan ratio for production fees does not exceed 16% of the total outstanding loan. D) The proportion of loans for securities business does not exceed 20% of the bank's charter capital. Show Answer Correct Answer: A) The ratio of using short-term resources for medium and long-term loans is no more than 30%. 19. Which of the following IS NOT a BASIC TYPE OF LOANS? A) Regular. B) Special. C) Livelihood. D) Restructure. Show Answer Correct Answer: D) Restructure. 20. An illustration of credit risk is: A) Bank branch manager embezzled 100 billion. B) The bank lost 120 billion because of foreign currency transactions. C) A business's 10 billion commercial loan has not collected interest or principal for the past 2 years. D) All right. Show Answer Correct Answer: C) A business's 10 billion commercial loan has not collected interest or principal for the past 2 years. ← PreviousNext →Related QuizzesCredit Risk Management Quiz 1Credit Risk Management Quiz 2Credit Risk Management Quiz 4Credit Risk Management Quiz 5Enterprise Risk Management QuizOperational Risk Management Quiz 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books