In the name of ALLAH, the most beneficient, the most merciful

Credit & Risk Management (FIN625)

Multiple Choice Questions (MCQs)

Objective Questions

  1. All of the following are the major causes of serious banking problems, EXCEPT:

    1. Lax credit standards for borrowers
    2. Lax credit standards for counterparties
    3. Poor portfolio risk management
    4. Having attention to varying economic circumstances
  2. Which of the following is in many countries, a record of an individual's or company's past borrowing and repaying, including information about late payments and bankruptcy?

    1. Credit history
    2. Credit rating
    3. Credit repair
    4. Credit union
  3. The system which is used for the verification of the legitimacy of an individual's public identity is called ________.

    1. Credit worthiness
    2. Credit history
    3. Identity score
    4. Credit score
  4. Creditworthiness of a borrower is represented by a numerical expression that is called ________.

    1. Credit rating
    2. Credit report
    3. Credit score
    4. Identity score
  5. Which of the following is the process of assessing risks and taking steps to either eliminate or to reduce them (as far as is reasonably practicable) by introducing control measures?

    1. Strategic management
    2. Operations management
    3. Risk management
    4. Credit management
  6. Risk management often aligned with which activities.

    1. Project management or systems engineering
    2. Operation management or MIS
    3. Financial management or investment management
    4. MIS or financial management
  7. The Credit Bureau or Credit Reference Agency is a company that ________.

    1. Provides credit to public
    2. Provides consumer credit information on individual borrower
    3. Only exists in USA and UK
    4. Works for credit card companies only
  8. Banks should ensure that the credit risk involved in new products and activities needs prior approval by the ________.

    1. Senior management
    2. Branch manager
    3. Board of directors
    4. Middle management
  9. All of the following are the activities covered in a credit history or credit report, EXCEPT:

    1. Consumer's payment patterns
    2. Consumer's lending patterns
    3. Consumer's credit balances
    4. Consumer's credit inquiries by debtors
  10. Corporate credit scoring is represented through ________.

    1. Numerical expression
    2. Algebraic expression
    3. Capital Letters
    4. Small letters