what is the best provisioning methodology in loan impairement and why?

Q: Define the term Deferred Loan Repayments?

A: Answer: A deferred loan payment is nothing but a loan agreement in which the borrower may start…

Q: how can Credit Metrics Model resolve credit risk management issues

A: what is credit risk- credit risk is that the risk to default ensuing from a receiver failure to…

Q: What is credit quality, and how is it assessed?

A: Credit quality:   Credit quality defines how much a company is capable of repaying its debt on time…

Q: Type of CPM Loan?

A: Introduction: CPM refers to constant payment mortgage, this is nothing but an arrangement…

Q: Describe the Repayment Plans Offered by the Lender?

A: Answer: A repayment plan is a method of repaying a debt over an extended period of time, usually by…

Q: What is the loan cash flow?

A: Answer: A cash flow loan is nothing but a form of debt finance in which bank lends money usually for…

Q: what basic criteria are commonly used in evaluating credit risk?

A: Credit risk is the risk of facing a loss due to a counterpart's failure to repay the debt in part or…

Q: What is credit enhancement, and what effect does it have on debt costs?

A: Credit enhancement represents the strategy that improves the business' credit risk profile. It helps…

Q: Which of the following has the highest relative likelihood of being defaulted in paying the…

A: The interest expense and earnings before interest and income taxes details for each of the company…

Q: What is a mini-perm or bullet loan? When and why is this type of loan used?

A: Answer: Project development may be characterized as the process of designing, planning,…

Q: give the definition, recognition, measurement and derecognition of "borrowing cost"

A: A uniform group of principles, standards, and procedures that explain the basic financial accounting…

Q: What two types of current assets are frequently used as security for short-term loans?

A: Short term loans are generally obtained by companies in order to support their temporary business…

Q: What are some possible agency conflicts between borrowers and lenders?

A: Answer: Agent: An agent is one who provides work on principal’s behalf.  Principal authorizes agent…

Q: Define the term truth-in-lending laws? What are its requirements?

A: Answer: The 1968 Truth in Lending Act (TILA) is a federal statute of US aimed at encouraging…

Q: lending

A: The term net lending is defined as an economic measure which measures as to whether the government…

Q: Explain Loan Amortization Patterns?

A: A loan amortization pattern, as made by an amortization calculator, maybe a table enumerating each…

Q: Define Loan Refinancing?

A: Introduction: A loan refinancing permits a debtor to replace their present obligation of debt with…

Q: Explain Issuance of loans to unworthy entities with examples

A: Issuance of loan to unworthy entities means granting of loans to the entities having a poor…

Q: What is meant by a term-loan agreement?

A: A Loan Agreement, also known as a term loan, demand loan, or loan contract. It basically is a legal…

Q: What does “nonrecourse” financing mean?

A: Nonrecourse financing is a branch of commercial lending. It makes the lender only to repay from the…

Q: Which are the fundamental relationships to know in any loan refinancing decision include at least…

A: Loan refinancing decision involves replacement of an existing debt with a new debt. The intention of…

Q: Related to ethics and contracts, why do payday loans appear to be an ethical issue?

A: Payday loans are small ticket loans for a short duration. The borrower pays back the loan when he…

Q: What is the purpose of a bridge loan?

A: Bridge loan is a short term loan taken to finance short term requirements of funds while awaiting…

Q: When should a debt security be classified as held-tomaturity?

A: Debt securities: Debt security is money borrowed at a specific rate of interest which must be repaid…

Q: What is a buydown loan? What parties are usually involved in this kind of loan?

A: INTRODUCTION There are various mortgage financing techniques which helps to reduce cost for the…

Q: What is the role of transferring credit risk? What is the various instruments used to transfer this…

A: Risk transfer is a management strategy that involves transferring the risk from one party to another…

Q: What are the financing borrowing activities?

A: The statement of cash flows is the statement which shows the change in the cash and cash equivalents…

Q: What is Secured Borrowing?

A:

Q: EXplain the loan structuring?

A: Loan restructuring is designing of loan according to the requirements of the borrower and also to…

Q: What is a compensating balance? What effect does a compensatingbalance requirement have on the…

A:

Q: What are the benefits of using debt security?

A: The financial instruments which are bought by investors, or corporations, or mutual funds, are…

Q: why loan officer prefer accrual basis accounting

A: The financial statement of a firm can be prepared based on accrual basis of accounting or cash basis…

Q: How are refundable deposits and customer advances similar? How do they differ?

A: Refundable Deposits: Refundable deposits are that money in advance offered by the customer. It is a…

Q: Describe the concept of non interest bearing on loan.

A: A non-interest bearing loan is a debt for which there is no documented requirement for the borrower…

Q: What are the pros and cons of loaning?

A: Loaning is a process of lending money. An interest rate is charged by the lenders on the money lent…

Q: What is the main purpose of loan loss provisioning? Explain the concepts of incurred loss model and…

A: The loan loss provision is the cash reserve created by the banks for the future credit risk. The…

Q: Explain the term Verification of Borrower Assets?

A: Borrower is the person who take money on credit from a financial or non- financial institution.…

Q: What are the credit transfer markets?

A: Financial market is called as a place where all securities such as bonds, shares, debentures etc.…

Q: Explain the term Loan Repayment Schedule?

A: Loan is a sum of money borrowed by an individual/organization from a bank or lender that has to be…

Q: How is certificate of deposit beneficial?

A: A certificates of deposit basically are a sort of the financial savings account that holds a sure…

Q: What is a promissory note? What are its benefits?

A: Promissory note:A promissory note is a legal financial instrument that has a written promise between…

Q: What is trade-off credit and collection policies and its compositions?

A: A external financing is an agreement agreement understanding between partners that facilitates the…

Q: Which of the following shows the timeline of the loan from the lender's perspective?

A: A lender is the one who lends to the other party. In return, the lender receives the sum with an…