Which if the following is not true of the 5Cs in evaluating credit quality A Character refers to the integrity and honesty of the borrower and applies to both individuals and companies B Capital refers to the savings or wealth of the borrower as an additional source of income to repay the loan C Collateral refers to assets that are pledged to lender D Capacity refer to external factors including the state of economy that can impact the borrower’s source of income
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Which if the following is not true of the 5Cs in evaluating credit quality
A Character refers to the integrity and honesty of the borrower and applies to both individuals and companies
B Capital refers to the savings or wealth of the borrower as an additional source of income to repay the loan
C Collateral refers to assets that are pledged to lender
D Capacity refer to external factors including the state of economy that can impact the borrower’s source of income.
Answer: (b) Capital refers to the savings or wealth of the borrower as an additional source of income to repay the loan
Capital refers to the borrower's financial resources that can be used as a source of repayment for the loan, such as savings, investments, or other assets. It does not refer to wealth as an additional source of income.
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