CLFP SAMPLE EXAM
CLFP SAMPLE EXAM - CREDIT QUESTIONS AND ANSWERS GRADED A+
Fundamentally, _________ risk is the chance of not receiving money back in a timely manner and as
agreed.
Select one:
a. Business
b. Compliance
c. Legal
d. Credit ANS >> Answer:
D) Credit
What is considered the process in lending that determines the acceptability of a proposed transaction
based on the inherent risk of the deal and the lender's or lessor's credit policies?
Select one:
a. Underwriting
b. Documentation
c. Business risk analysis
d. Origination ANS >> Answer:
,CLFP SAMPLE EXAM
A) Underwriting
The role of a credit analyst in an equipment finance company is to make decisions within the parameters
of an organization's risk appetite. The ultimate question to be answered: does the transaction make
sense? Considering the ____ "Cs" of credit can help in answering these questions.
Select one:
a. Five
b. Six
c. Four
d. Seven ANS >> Answer:
A) Five
One way to think about credit in a lending organization is within the context of a "____________"
framework of which credit policy is a component. This framework is a foundation for making decisions.
Select one:
a. Relationship
b. Risk appetite
c. Procedures
d. Guidelines ANS >> Answer:
B) Risk Appetite
The following equation is used to determine the expected loss:
% PD * LGD * EAD = Expected Loss
In this equation, what does 'PD' refer to?
Select one:
, CLFP SAMPLE EXAM
a. PD is a lessor's post-default judgment.
b. PD provides an estimate of the likelihood that a borrower will be unable to repay debt obligations.
c. PD is a lessor's exposure at default.
d. PD refers to the amount of money a bank or other financial institution would lose should a borrower
default on loan. ANS >> Answer:
B) PD provides an estimate of the likelihood that a borrower will be unable to repay debt obligations.
Although each company may define these ranges slightly different, a large-ticket transaction is generally
considered as the following:
Select one:
a. Transactions over $2,500,000
b. Transactions over $500,000
c. Transactions over $5,000,000
d. Transactions over $250,000 ANS >> Answer:
C) Transactions over $5,000,000
What type of transactions are often credit scored and may also use automatic credit decisions?
Select one:
a. Commercial transactions
b. Small-ticket transactions
c. Middle-ticket transactions
d. Large-ticket transactions ANS >> Answer:
B) Small-ticket transactions
CLFP SAMPLE EXAM - CREDIT QUESTIONS AND ANSWERS GRADED A+
Fundamentally, _________ risk is the chance of not receiving money back in a timely manner and as
agreed.
Select one:
a. Business
b. Compliance
c. Legal
d. Credit ANS >> Answer:
D) Credit
What is considered the process in lending that determines the acceptability of a proposed transaction
based on the inherent risk of the deal and the lender's or lessor's credit policies?
Select one:
a. Underwriting
b. Documentation
c. Business risk analysis
d. Origination ANS >> Answer:
,CLFP SAMPLE EXAM
A) Underwriting
The role of a credit analyst in an equipment finance company is to make decisions within the parameters
of an organization's risk appetite. The ultimate question to be answered: does the transaction make
sense? Considering the ____ "Cs" of credit can help in answering these questions.
Select one:
a. Five
b. Six
c. Four
d. Seven ANS >> Answer:
A) Five
One way to think about credit in a lending organization is within the context of a "____________"
framework of which credit policy is a component. This framework is a foundation for making decisions.
Select one:
a. Relationship
b. Risk appetite
c. Procedures
d. Guidelines ANS >> Answer:
B) Risk Appetite
The following equation is used to determine the expected loss:
% PD * LGD * EAD = Expected Loss
In this equation, what does 'PD' refer to?
Select one:
, CLFP SAMPLE EXAM
a. PD is a lessor's post-default judgment.
b. PD provides an estimate of the likelihood that a borrower will be unable to repay debt obligations.
c. PD is a lessor's exposure at default.
d. PD refers to the amount of money a bank or other financial institution would lose should a borrower
default on loan. ANS >> Answer:
B) PD provides an estimate of the likelihood that a borrower will be unable to repay debt obligations.
Although each company may define these ranges slightly different, a large-ticket transaction is generally
considered as the following:
Select one:
a. Transactions over $2,500,000
b. Transactions over $500,000
c. Transactions over $5,000,000
d. Transactions over $250,000 ANS >> Answer:
C) Transactions over $5,000,000
What type of transactions are often credit scored and may also use automatic credit decisions?
Select one:
a. Commercial transactions
b. Small-ticket transactions
c. Middle-ticket transactions
d. Large-ticket transactions ANS >> Answer:
B) Small-ticket transactions
