CEC Certification Exam

Your manager has asked you to prepare an analysis for a borrowing request at Your Bank. Which of the following tasks are you most likely to complete first? a. Prepare a term sheet b. Create a projection c. Analyze the company's available collateral d. Evaluate the company's business strategy - Answer- D You are calling for the first time on the owner of a successful local business that currently banks with another bank in your market. You are very interested in developing a banking relationship with the business and its owner. Which of the following goals will be most important to achieve in the initial meeting? a. Obtain a commitment from the owner to open a checking account at your bank. b. Offer a term sheet outlining a loan at a competitive rate. c. Learn about the owner's business and personal objectives. d. Gather the most recent financial statements on the business. - Answer- C Gruper Home Appliances, Inc., a manufacturer of kitchen appliances, sells 70% of its goods to X-Mart, a large national retailer of consumer durables. Which of the following best describes the reason why Gruper has a low degree of bargaining power with X-Mart? a. There are no substitutes for the product b. The suppliers have high variable costs c. Customers have brand loyalty d. Sales are concentrated with a large volume buyer - Answer- D The NBER has released a report that suggests the economy is showing signs that it is moving into early contraction. You review your current portfolio to develop a list of customers that are likely to fare best through this cycle. Which of the following would be included on your list? a. A plumbing supplies distributor b. A local high fashion retailer c. A manufacturer of auto engines d. A local accounting firm - Answer- D You are preparing to meet with the owner of Style-For-Less, a successful retailer of apparel geared to young professionals. The owner has obtained and outfitted a second location in a high-traffic retail mall in preparation for its planned opening and has asked to meet with you to discuss a possible financing need. Based on the industry, you think the owner will most likely have a need for: a. A commercial mortgage to purchase the new location b. A lease to fund the acquisition of store fixtures c. A line of credit to purchase inventory for the upcoming season d. A term loan to purchase a point-of-sale system - Answer- C