CFI CBCA CORE QUESTION BANK 2026
PROFESSIONAL REVIEW PAPER SOLUTIONS
UPDATED A+
◉ If a loan is secured by a limited corporate guarantee, what will
happen when the borrower is unable to repay the debt?
Answer: The lender has the right to pursue the assets of the
company within a specific dollar amount.
◉ Which of the following security assets are considered personal
property? Select ALL correct answers.
Answer: Bonds and equities, Consumer goods
◉ Which of the following security assets are NOT considered
personal property? Select ALL correct answers.
Answer: Land, Factories, Office buildings
◉ Which of the following may indicate low-quality inventory?
Answer: There is a limited shelf-life
◉ Which of the following is NOT an aspect to consider when
evaluating the quality of machinery and equipment?
,Answer: The cost to maintain the asset
◉ Which of the following are aspects to consider when evaluating
the quality of machinery and equipment?
Answer: The market value of the asset, The life expectancy of the
asset, The condition of the asset
◉ Which is a typical source of information used in ascertaining the
value of the real property?
Answer: Real estate listings
◉ It is the legal counsel's responsibility to: (Select ALL correct
answers)
Answer: Ensure that the security is properly registered.
Advise the borrower that the lender can pursue all their assets in the
event of default.
◉ Which of the following is NOT correct on security registration and
documentation?
Answer: It is the borrower's responsibility to ensure that the loan
security documentation is properly completed and registered.
◉ Which of the following are correct on security registration and
documentation?
, Answer: Common Security documentations include mortgage
appraisal, assignment of leases and rents, and general security
agreement.
The registration of the security is done differently in various
jurisdictions around the world.
It is the lender's responsibility to ensure all loans are adequately
secured.
◉ Which of the following is NOT a benefit of including covenants in a
loan agreement?
Answer: Covenants protect lenders by reducing their financial loss
in the event of default.
◉ Which of the following is a benefit of including covenants in a loan
agreement?
Answer: Covenants restrict borrowers from taking actions that can
increase the risk for the lenders; Covenants provide borrowers with
clear expectations of the lenders; Covenants reduce the cost of
borrowing because lenders are more willing to provide a lower
interest rate when they can impose restrictions.
◉ Select ALL the non-financial covenants from the list.
Answer: The company cannot change its business operations; The
company must maintain minimum insurance coverage of 2 million.
PROFESSIONAL REVIEW PAPER SOLUTIONS
UPDATED A+
◉ If a loan is secured by a limited corporate guarantee, what will
happen when the borrower is unable to repay the debt?
Answer: The lender has the right to pursue the assets of the
company within a specific dollar amount.
◉ Which of the following security assets are considered personal
property? Select ALL correct answers.
Answer: Bonds and equities, Consumer goods
◉ Which of the following security assets are NOT considered
personal property? Select ALL correct answers.
Answer: Land, Factories, Office buildings
◉ Which of the following may indicate low-quality inventory?
Answer: There is a limited shelf-life
◉ Which of the following is NOT an aspect to consider when
evaluating the quality of machinery and equipment?
,Answer: The cost to maintain the asset
◉ Which of the following are aspects to consider when evaluating
the quality of machinery and equipment?
Answer: The market value of the asset, The life expectancy of the
asset, The condition of the asset
◉ Which is a typical source of information used in ascertaining the
value of the real property?
Answer: Real estate listings
◉ It is the legal counsel's responsibility to: (Select ALL correct
answers)
Answer: Ensure that the security is properly registered.
Advise the borrower that the lender can pursue all their assets in the
event of default.
◉ Which of the following is NOT correct on security registration and
documentation?
Answer: It is the borrower's responsibility to ensure that the loan
security documentation is properly completed and registered.
◉ Which of the following are correct on security registration and
documentation?
, Answer: Common Security documentations include mortgage
appraisal, assignment of leases and rents, and general security
agreement.
The registration of the security is done differently in various
jurisdictions around the world.
It is the lender's responsibility to ensure all loans are adequately
secured.
◉ Which of the following is NOT a benefit of including covenants in a
loan agreement?
Answer: Covenants protect lenders by reducing their financial loss
in the event of default.
◉ Which of the following is a benefit of including covenants in a loan
agreement?
Answer: Covenants restrict borrowers from taking actions that can
increase the risk for the lenders; Covenants provide borrowers with
clear expectations of the lenders; Covenants reduce the cost of
borrowing because lenders are more willing to provide a lower
interest rate when they can impose restrictions.
◉ Select ALL the non-financial covenants from the list.
Answer: The company cannot change its business operations; The
company must maintain minimum insurance coverage of 2 million.
