Which of the following does not relate to credit risks?  a. Credit risk is the possibility of losing a lender takes on due to the possibility of a borrower not paying back a loan b. It refers to the risk that a lender may not receive the owed principal and interest c. Credit risk also describes the risk that an insurance company will be able to pay a claim. d. Credit risk is the possibility of a loss resulting from a borrower's failure to repay a loan or meet contractual obligations e. Credit risk describes the risk that a bond issuer may fail to make payment when requested

Q: What does default mean? Does it occur only when borrowers fail to make scheduled loan payments?

A: Default is the risk involved in providing the mortgage loan. Default indicates the incapability of…

Q: Moral hazard or its reduction explain the following except: O A. Collateral requirements for loans.…

A: A moral hazard is the concept that a party who is protected from risk in some way will behave…

Q: Which are the major problems facing a lender when reviewing a loan request made by a borrower?

A: Introduction: A loan agreement is nothing but an agreement between a lender and the borrower which…

Q: Which of the following is true of an unsecured loan? A. They are exclusively for cars, houses, and…

A: Loan can be defined as money that somebody lends other person in exchange of some interest that is…

Q: Unsecured creditors: have rights to be paid amounts owed, but the rights may have to be enforced…

A: Correct option is 1. i.e unsecured creditors have rights to be paid amounts owed, but the rights may…

Q: A type of risk where the issuer of the security will not pay interest or principal. *

A: Risk is defined as the probability with which an outcome or an investment in a security's actual…

Q: Where will we record when there is a decrease in liability? O a. Debit side O b. Credit side c. None…

A: According to the rules of accounting  revenues, liabilities and equity are credited on increase and…

Q: Liquidity risk is the risk where the borrowers not being able to repay the loan leading to banks…

A: In general terms, liquidity risk is the risk that individual, institution is not able to meet and…

Q: Regarding accounting for troubled debt, the three  statements that are not true are the following...…

A: Troubled debt restructuring refers to that debt restructuring when a creditor takes into…

Q: Collateral does not reduce the risk of a loan per se, because A. it is not part of the loan…

A: Collateral = It refers to asset, being pledged by bank against the loan given to its customer in…

Q: Which of the following is NOT a reason for sales discounts to be offered to the debtors(customers)?…

A: Sales Discount :-  Sales discount is offered to debtors to encourage earlier settlement of debts by…

Q: t relevant assertion should be used to record loans receivable net of an allowance for loan losses…

A: A loan receivable is that the amount of money owed from a human to a creditor (typically a bank or…

Q: As long as you have a strong reason for taking a loan, there is no need to understand the terms of…

A: Understanding the terms in a loan agreement is vital. Loan agreements are an critical a part of…

Q: Explain further the effects/impacts of default on asset-backed security (ABS) to the financial…

A: The question is based on the concept of asset-backed security (ABS). ABS is a financial instrument…

Q: Your company provides credit to customers. Someof these customers default on their loans, with…

A: Discriminant analysis is the analysis which provide the permission to organization in determining…

Q: How does credit risk affect insurance companies

A: Credit risks affect insurance companies in a tangible and often direct manner.

Q: Define the Credit Risk and include in your discussion examples of the Credit Risk and why Financial…

A: A large number of financial transactions take place in the financial system and each transaction…

Q: Which of the following is an arrangement by which one party promises to pay a sum of money to…

A: Insurance is a contract between two parties where one party i,e policy holder pays a premium to…

Q: Collateral is a valuable asset that is pledged to ensure loan payments. If you fail to repay the…

A: In mortgage loans, collateral is an asset or security used to take loan.

Q: What is a limitation common to both the current and quick ratio? *       Debtors may not pay on…

A: CURRENT RATIO: current ratio = current assetcurrent liabilities QUICK RATIO: quick ratio = current…

Q: he purpose of the inflation premium is to maintain the purchasing power of money while it is loaned…

A: a) An inflation premium is added to interest rates for compensating for expected inflation by…

Q: A bank guarantee is a guarantee from a lending institution ensuring the liabilities of a debtor will…

A: Bank guarantee refers to the form of surety that is being provided by a financial lending…

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: Which of the following is a borrower's right provided by the Mortgage Bankers Association that is…

A: The mortgage bankers association (MBA) is referred to as the national association which mainly…

Q: refers to the possibility that the debtors supported by bank credit are unable or unwilling to repay…

A: Commercial banks are providers of funds and financing to their customers who are in need of funds.…

Q: Which of the following is a characteristic of a current​ liability?   A. It is an avoidable…

A: Liabilities are classified into two types. 1. Current liabilities ; which are expected to be paid…

Q: to the individual or company that 3. A security is issues it. to the person who buys it, but A)…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 2. Substantial amount of credit losses is due to poor loan monitoring. In view of this, suggest how…

A: Loan is when the funds are given to some other party in an exchange regarding the repayment of the…

Q: Which of the following is a FALSE statement? A mortgage does not give the lender a right to be paid…

A: A mortgage is an agreement between banks or other persons wherein money is lent to the borrower by…

Q: The advantage of relating the bad debt experience to accounts receivable is that this approach

A: There is a convention of conservatism or prudence, it is the policy of playing safe. According to…

Q: Which type of information asymmetry explains why bad credit risks are more likely to seek bank…

A: Adverse selection, as a rule, alludes to a circumstance where dealers have data that buyers do not…

Q: what are two types of credit

A: "We’ll answer the first question since the exact one wasn’t specified. Please submit a new question…

Q: Risk mitigation tools used specifically by secured lenders are least likely to include detailed…

A: The question is based on the concept of credit assessment and credit risk management. The credit…

Q: What are the stages and processes for resolving bad loans? note: include a reference

A: Bad Loans: When a loan made by a bank cannot be recovered, either partially or fully, it is termed a…

Q: One example of moral hazard in finance industry is "insurance policies often decreases incentive to…

A: When one party to a contract participates in reckless action knowing that the other party will pay…

Q: What will the company record for bad debt expense?

A:

Q: Which of the following is not a characteristic of receivables? Select the correct response: The…

A: Option b, c and d are the characteristics of receivables. Option a is the characteristic of an…

Q: What is meant by bad debts recovery? Give two illustrative example.

A: Bad debt refers to loans or outstanding balances owed that are no recoverable and must be written…

Q: Discuss the two theories of mortgage default. What are the most important factors that influence the…

A: Mortgage Default In simple term mortgage default which is described as default from the borrower to…