Question 1

Which of the following has the greatest weight in determining a consumer's FICO score?

Accepted Answer

A) Current credit use 
B) Credit mix 
C) Payment history. 
D) Length of credit history 
E) Number of applications for new credit 
A) Current credit use 
B) Credit mix 
C) Payment history. 
D) Length of credit history 
E) Number of applications for new credit

Question 2

Losses on credit cards are among the highest of all consumer loan types.

Accepted Answer

A) True 
 B)False

Question 3

Credit cards typically provide lower risk-adjusted returns than other types of consumer loans.

Accepted Answer

A) True 
 B)False

Question 4

Credit cards are profitable for banks because many customers are prince insensitive.

Accepted Answer

A) True 
 B)False

Question 5

The national average FICO score is:

Accepted Answer

A) 370 
B) 470 
C) 570 
D) 670 
E) 770 
A) 370 
B) 470 
C) 570 
D) 670 
E) 770

Question 6

Which of the following contains a computer memory chip?

Accepted Answer

A) Debit card 
B) Credit card 
C) Smart card 
D) Pre-Paid card 
E) ATM card 
A) Debit card 
B) Credit card 
C) Smart card 
D) Pre-Paid card 
E) ATM card

Question 7

Credit scoring models are less objective than judgmental evaluations.

Accepted Answer

A) True 
 B)False

Question 8

The lowest rating category for a subprime loan is:

Accepted Answer

A) A 
B) B 
C) C 
D) D 
E) E 
A) A 
B) B 
C) C 
D) D 
E) E

Question 9

How do banks use credit-scoring models? If you were developing such a model, what factors do you think would be important in determining if an applicant is a good credit risk?

Accepted Answer

Banks use credit-scoring models to asses

Question 10

A FICO score summarizes an individual's credit history in one number.

Accepted Answer

A) True 
 B)False

Which of the following has the greatest weight in determining a consumer's FICO score?

Losses on credit cards are among the highest of all consumer loan types.

Credit cards typically provide lower risk-adjusted returns than other types of consumer loans.

Credit cards are profitable for banks because many customers are prince insensitive.

The national average FICO score is:

Which of the following contains a computer memory chip?

Credit scoring models are less objective than judgmental evaluations.

The lowest rating category for a subprime loan is:

How do banks use credit-scoring models? If you were developing such a model, what factors do you think would be important in determining if an applicant is a good credit risk?

A FICO score summarizes an individual's credit history in one number.

Banking and the Financial Services Industry

Government Policies and Regulation

Analyzing Bank Performance

Managing Noninterest Income and Noninterest Expense

The Performance of Nontraditional Banking Companies

Pricing Fixed-Income Securities

Managing Interest Rate Risk: Gap and Earnings Sensitivity

Managing Interest Rate Risk: Economic Value of Equity

Using Derivatives to Manage Interest Rate Risk

Funding the Bank

Managing Liquidity

The Effective Use of Capital

Overview of Credit Policy and Loan Characteristics

Evaluating Commercial Loan Requests and Managing Credit Risk

Managing the Investment Portfolio

Global Banking Activities

Filters

Exam 15: Evaluating Consumer Loans

Which of the following has the greatest weight in determining a consumer's FICO score?

Losses on credit cards are among the highest of all consumer loan types.

Credit cards typically provide lower risk-adjusted returns than other types of consumer loans.

Credit cards are profitable for banks because many customers are prince insensitive.

The national average FICO score is:

Which of the following contains a computer memory chip?

Credit scoring models are less objective than judgmental evaluations.

The lowest rating category for a subprime loan is:

How do banks use credit-scoring models? If you were developing such a model, what factors do you think would be important in determining if an applicant is a good credit risk?

A FICO score summarizes an individual's credit history in one number.

Banking and the Financial Services Industry

Government Policies and Regulation

Analyzing Bank Performance

Managing Noninterest Income and Noninterest Expense

The Performance of Nontraditional Banking Companies

Pricing Fixed-Income Securities

Managing Interest Rate Risk: Gap and Earnings Sensitivity

Managing Interest Rate Risk: Economic Value of Equity

Using Derivatives to Manage Interest Rate Risk

Funding the Bank

Managing Liquidity

The Effective Use of Capital

Overview of Credit Policy and Loan Characteristics

Evaluating Commercial Loan Requests and Managing Credit Risk

Managing the Investment Portfolio

Global Banking Activities

Filters