RMA FINAL EXAM WITH VERIFIED SOLUTIONS
1.Your tmanager thas tasked tyou tto tprepare tan tanalysis tfor ta tborrowing
trequest tat tYour tBank. tWhich tof tthe tfollowing ttasks tare tyou tmost tlikely tto
tcomplete tfirst?: ta. tPrepare ta tterm tsheet
b.Create ta tprojection
c. Analyze tthe tcompany's tavailable tcollateral
d. Evaluate tthe tcompany's tbusiness tstrategy
2.You tare tcalling tfor tthe tfirst ttime ton tthe towner tof ta tsuccessful tlocal
tbusiness tthat tcurrently tbanks twith tanother tbank tin tyour tmarket. tYou tare
tvery tinterested tin tdeveloping ta tbanking trelationship twith tthe tbusiness tand
tits towner. tWhich tof tthe tfollowing tgoals twill tbe tmost timportant tto tachieve tin
tthe tinitial tmeeting?: ta. tObtain ta tcommitment tfrom tthe towner tto topen ta
tchecking taccount tat tyour tbank.
b.Offer ta tterm tsheet toutlining ta tloan tat ta tcompetitive trate.
c. Learn tabout tthe towner's tbusiness tand tpersonal tobjectives.
d. Gather tthe tmost trecent tfinancial tstatements ton tthe tbusiness.
3.Gruper tHome tAppliances, tInc., ta tmanufacturer tof tkitchen tappliances,
tsells t70% tof tits tgoods tto tX-Mart, ta tlarge tnational tretailer tof tconsumer
tdurables. tWhich tof tthe tfollowing tbest tdescribes tthe treason twhy tGruper thas
ta tlow tdegree tof tbargaining tpower twith tX-Mart?: ta. tThere tare tno
tsubstitutes tfor tthe tproduct
b.The tsuppliers thave thigh tvariable tcosts
1 t/
t22
,c. Customers thave tbrand tloyalty
d. Sales tare tconcentrated twith ta tlarge tvolume tbuyer
4.The tNBER thas treleased ta treport tthat tsuggests tthe teconomy tis tshowing
tsigns tthat tit tis tmoving tinto tearly tcontraction. tYou treview tyour tcurrent
tportfolio tto tdevelop ta tlist tof tcustomers tthat tare tlikely tto tfare tbest tthrough
tthis tcycle. tWhich tof tthe tfollowing twould tbe tincluded ton tyour tlist?: ta. tA
tplumbing tsupplies tdistributor
b. tA tlocal thigh tfashion tretailer
c. tA tmanufacturer tof tauto tengines
d. tA tlocal taccounting tfirm
5.You tare tpreparing tto tmeet twith tthe towner tof tStyle-For-Less, ta
tsuccessful tretailer tof tapparel tgeared tto tyoung tprofessionals. tThe towner
thas tobtained tand toutfitted ta tsecond tlocation tin ta thigh-traffic tretail tmall tin
tpreparation tfor tits tplanned topening tand thas tasked tto tmeet twith tyou tto
tdiscuss ta tpossible tfinancing tneed. tBased ton tthe tindustry, tyou tthink tthe
towner twill tmost tlikely thave ta tneed tfor:: ta. tA tcommercial tmortgage tto
tpurchase tthe tnew tlocation
b. tA tlease tto tfund tthe tacquisition tof tstore tfixtures
c. tA tline tof tcredit tto tpurchase tinventory tfor tthe tupcoming tseason
d. tA tterm tloan tto tpurchase ta tpoint-of-sale tsystem
2 t/
t22
, 6.Parsons tand tAssociates tis ta thighly-regarded tbusiness tfinancial tadvisory
tfirm tlocated tin ta tdowntown toffice tbuilding tthat twas tfounded tthirty-five
tyears tago tby tGrant tParsons. tYour tbank thas ta tlong-term trelationship twith
tboth tthe tbusiness tand tits tfounder.You trecently tsaw tGrant tParsons tat ta
tbank-sponsored teconomic toutlook tforum tand the tsuggested tyou tstop tby
this toffice tto tdiscuss tsome tpotential topportunity. tBased ton tthe ttype tof
tcompany tand tlife tcycle tstage, twhich tof tthe tfollowing tdo tyou tthink tis tthe
tmost tlikely topportunity tto tbe tdiscussed?: ta. tA tmortgage tto tfund tthe
tpurchase ta tnew tbuilding.
b. tA tline tof tcredit tto tfund ta tseasonal tbuildup tin treceivables.
c. tA tterm tloan tto tfund tthe tbuyout tof this tinterest tby this tpartners.
d. tA tnew tloan tto trefinance this thome tmortgage.
7.The tConference tBoard tannounced ttoday tthat tinterest trates tremain tlow.
tReports tindicate tthat tcompanies tare tholding tlower tinventories tand tcapital
texpenditures thave tdecreased. tThe tavailability tof tcredit tcontinues tto tbe
ttight. tBased ton tthe tabove treport, twhich tof tthe tfollowing tbest tdescribes tthe
tcurrent tstage tin tthe tgeneral tbusiness tcycle?: ta. tEarly texpansion
b.Late texpansion
c. Early tcontraction
d. Late tcontraction
8.The teconomy tis tentering tthe tlate tcontraction tstage tof tthe tbusiness
tcycle. tYour tBank thas tfour tcustomers trequesting tan tincrease tto ttheir tlines
tof tcredit. tAssuming ttheir toverall tcreditworthiness tis tcomparable, twhich tof
tthe tfollowing tcustomers twould texhibit tthe tleast trisk tto tthe tBank?: ta. tA
twholesaler tof tfloor tcoverings
b.An tupscale tchildren's tclothing tboutique
c. A tbeer tand tsoda tdistributor
d. A ttemporary tstaffing tfirm
9.In twhich tindustry tlifecycle tstage twould tcompanies tbe tmost tlikely tto
tfocus ton tcost tdiscipline?: ta. tIntroductory
b.Growth
c. Mature
d. Decline
10.In twhich tcompany tlifecycle tstages tis ta tcompany tmost tlikely tto tbe
tprof- titable?: ta. tIntroductory tand tgrowth
b.Growth tand tmature
c. Mature tand tdeclining
d. Introductory tand tdeclining
11.In twhich tcompany tlifecycle tstage tis ta tcompany tmost tlikely tto tinvest
3 t/
t22
1.Your tmanager thas tasked tyou tto tprepare tan tanalysis tfor ta tborrowing
trequest tat tYour tBank. tWhich tof tthe tfollowing ttasks tare tyou tmost tlikely tto
tcomplete tfirst?: ta. tPrepare ta tterm tsheet
b.Create ta tprojection
c. Analyze tthe tcompany's tavailable tcollateral
d. Evaluate tthe tcompany's tbusiness tstrategy
2.You tare tcalling tfor tthe tfirst ttime ton tthe towner tof ta tsuccessful tlocal
tbusiness tthat tcurrently tbanks twith tanother tbank tin tyour tmarket. tYou tare
tvery tinterested tin tdeveloping ta tbanking trelationship twith tthe tbusiness tand
tits towner. tWhich tof tthe tfollowing tgoals twill tbe tmost timportant tto tachieve tin
tthe tinitial tmeeting?: ta. tObtain ta tcommitment tfrom tthe towner tto topen ta
tchecking taccount tat tyour tbank.
b.Offer ta tterm tsheet toutlining ta tloan tat ta tcompetitive trate.
c. Learn tabout tthe towner's tbusiness tand tpersonal tobjectives.
d. Gather tthe tmost trecent tfinancial tstatements ton tthe tbusiness.
3.Gruper tHome tAppliances, tInc., ta tmanufacturer tof tkitchen tappliances,
tsells t70% tof tits tgoods tto tX-Mart, ta tlarge tnational tretailer tof tconsumer
tdurables. tWhich tof tthe tfollowing tbest tdescribes tthe treason twhy tGruper thas
ta tlow tdegree tof tbargaining tpower twith tX-Mart?: ta. tThere tare tno
tsubstitutes tfor tthe tproduct
b.The tsuppliers thave thigh tvariable tcosts
1 t/
t22
,c. Customers thave tbrand tloyalty
d. Sales tare tconcentrated twith ta tlarge tvolume tbuyer
4.The tNBER thas treleased ta treport tthat tsuggests tthe teconomy tis tshowing
tsigns tthat tit tis tmoving tinto tearly tcontraction. tYou treview tyour tcurrent
tportfolio tto tdevelop ta tlist tof tcustomers tthat tare tlikely tto tfare tbest tthrough
tthis tcycle. tWhich tof tthe tfollowing twould tbe tincluded ton tyour tlist?: ta. tA
tplumbing tsupplies tdistributor
b. tA tlocal thigh tfashion tretailer
c. tA tmanufacturer tof tauto tengines
d. tA tlocal taccounting tfirm
5.You tare tpreparing tto tmeet twith tthe towner tof tStyle-For-Less, ta
tsuccessful tretailer tof tapparel tgeared tto tyoung tprofessionals. tThe towner
thas tobtained tand toutfitted ta tsecond tlocation tin ta thigh-traffic tretail tmall tin
tpreparation tfor tits tplanned topening tand thas tasked tto tmeet twith tyou tto
tdiscuss ta tpossible tfinancing tneed. tBased ton tthe tindustry, tyou tthink tthe
towner twill tmost tlikely thave ta tneed tfor:: ta. tA tcommercial tmortgage tto
tpurchase tthe tnew tlocation
b. tA tlease tto tfund tthe tacquisition tof tstore tfixtures
c. tA tline tof tcredit tto tpurchase tinventory tfor tthe tupcoming tseason
d. tA tterm tloan tto tpurchase ta tpoint-of-sale tsystem
2 t/
t22
, 6.Parsons tand tAssociates tis ta thighly-regarded tbusiness tfinancial tadvisory
tfirm tlocated tin ta tdowntown toffice tbuilding tthat twas tfounded tthirty-five
tyears tago tby tGrant tParsons. tYour tbank thas ta tlong-term trelationship twith
tboth tthe tbusiness tand tits tfounder.You trecently tsaw tGrant tParsons tat ta
tbank-sponsored teconomic toutlook tforum tand the tsuggested tyou tstop tby
this toffice tto tdiscuss tsome tpotential topportunity. tBased ton tthe ttype tof
tcompany tand tlife tcycle tstage, twhich tof tthe tfollowing tdo tyou tthink tis tthe
tmost tlikely topportunity tto tbe tdiscussed?: ta. tA tmortgage tto tfund tthe
tpurchase ta tnew tbuilding.
b. tA tline tof tcredit tto tfund ta tseasonal tbuildup tin treceivables.
c. tA tterm tloan tto tfund tthe tbuyout tof this tinterest tby this tpartners.
d. tA tnew tloan tto trefinance this thome tmortgage.
7.The tConference tBoard tannounced ttoday tthat tinterest trates tremain tlow.
tReports tindicate tthat tcompanies tare tholding tlower tinventories tand tcapital
texpenditures thave tdecreased. tThe tavailability tof tcredit tcontinues tto tbe
ttight. tBased ton tthe tabove treport, twhich tof tthe tfollowing tbest tdescribes tthe
tcurrent tstage tin tthe tgeneral tbusiness tcycle?: ta. tEarly texpansion
b.Late texpansion
c. Early tcontraction
d. Late tcontraction
8.The teconomy tis tentering tthe tlate tcontraction tstage tof tthe tbusiness
tcycle. tYour tBank thas tfour tcustomers trequesting tan tincrease tto ttheir tlines
tof tcredit. tAssuming ttheir toverall tcreditworthiness tis tcomparable, twhich tof
tthe tfollowing tcustomers twould texhibit tthe tleast trisk tto tthe tBank?: ta. tA
twholesaler tof tfloor tcoverings
b.An tupscale tchildren's tclothing tboutique
c. A tbeer tand tsoda tdistributor
d. A ttemporary tstaffing tfirm
9.In twhich tindustry tlifecycle tstage twould tcompanies tbe tmost tlikely tto
tfocus ton tcost tdiscipline?: ta. tIntroductory
b.Growth
c. Mature
d. Decline
10.In twhich tcompany tlifecycle tstages tis ta tcompany tmost tlikely tto tbe
tprof- titable?: ta. tIntroductory tand tgrowth
b.Growth tand tmature
c. Mature tand tdeclining
d. Introductory tand tdeclining
11.In twhich tcompany tlifecycle tstage tis ta tcompany tmost tlikely tto tinvest
3 t/
t22
