CFI CBCA CORE LATEST
COURSE EXAM
Which of the following is NOT a reason to perform an annual review on
a borrower? - ANSWERS-An annual review gives a borrower a sense of
general loan parameters such as the interest rate, time to maturity, and
security.
Which of the following is a reason to perform an annual review on a
borrower? - ANSWERS-An annual review provides an opportunity to do
a comprehensive re-assessment.
An annual review allows a lender to re-assess and meet a borrower's
changing needs.
An annual review helps a lender identify a borrower's business trends,
early warning signs and mitigate credit risk.
Which of the following activities will be performed during a security
review? - ANSWERS-A re-assessment of personal and corporate
guarantors.
Which of the following is the best reason to take on debt instead of
equity? - ANSWERS-Debt is non-dilutive.
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PAGE
1
, CFI CBCA CORE LATEST
COURSE EXAM
Which of the following types of debt ranks the LOWEST on the capital
stack? - ANSWERS-Mezz unsecured
Which debt repayment profile pays only interest throughout the loan
term, and pays off the full principal at the end of the loan term? -
ANSWERS-Bullet repayment
Which of these business categories are not on the banking spectrum? -
ANSWERS-Company banking
Which of these business categories are on the banking spectrum? -
ANSWERS-Corporate Banking
Commercial Banking
Business Banking
Which of the following components make up the overall interest rate
that is charged on the client's loan? - ANSWERS-Spread + Cost of
Funds
Based on the following scenarios, choose which company's loan request
would have the least favorable loss given default score. - ANSWERS-
END OF
PAGE
2
, CFI CBCA CORE LATEST
COURSE EXAM
Company Y is requesting a loan to finance the acquisition of a smaller
company in their industry.
Which of the following is NOT part of the risk-adjusted return formula?
- ANSWERS-Capital Requirement
Which of the following is part of the risk-adjusted return formula? -
ANSWERS-Interest Revenue
Closing Fees
Exposure at Default
Using the following information, calculate the risk-adjusted return.
•Loan Amount: $10,000,000
•Interest Rate: 5.0%
•Cost of Funds: 2.75%
•Fees: 10,000
•Expenses: 5,000
•Loss Given Default Rate: 25%
•Default Probability: 0.5% - ANSWERS-= 217,500
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PAGE
3
, CFI CBCA CORE LATEST
COURSE EXAM
Using the following information, calculate the risk-adjusted capital.
•Loan Amount: $10,000,000
•Capital Requirement: 12%
•Capital Ratio: 25% - ANSWERS-$300,000
Using the following information, calculate the RAROC.
•Risk-Adjusted Return: $80,000
•Loan Amount: $3,000,000
•Capital Requirement: 10%
•Capital Ratio: 75% - ANSWERS-35.56%
Which of the following was NOT discussed in this course within the
context of client negotiation levers? - ANSWERS-Loan Type
Which of the following was discussed in this course within the context
of client negotiation levers? - ANSWERS-All-in Rate
Amortization Period
Loan to Value
END OF
PAGE
4
COURSE EXAM
Which of the following is NOT a reason to perform an annual review on
a borrower? - ANSWERS-An annual review gives a borrower a sense of
general loan parameters such as the interest rate, time to maturity, and
security.
Which of the following is a reason to perform an annual review on a
borrower? - ANSWERS-An annual review provides an opportunity to do
a comprehensive re-assessment.
An annual review allows a lender to re-assess and meet a borrower's
changing needs.
An annual review helps a lender identify a borrower's business trends,
early warning signs and mitigate credit risk.
Which of the following activities will be performed during a security
review? - ANSWERS-A re-assessment of personal and corporate
guarantors.
Which of the following is the best reason to take on debt instead of
equity? - ANSWERS-Debt is non-dilutive.
END OF
PAGE
1
, CFI CBCA CORE LATEST
COURSE EXAM
Which of the following types of debt ranks the LOWEST on the capital
stack? - ANSWERS-Mezz unsecured
Which debt repayment profile pays only interest throughout the loan
term, and pays off the full principal at the end of the loan term? -
ANSWERS-Bullet repayment
Which of these business categories are not on the banking spectrum? -
ANSWERS-Company banking
Which of these business categories are on the banking spectrum? -
ANSWERS-Corporate Banking
Commercial Banking
Business Banking
Which of the following components make up the overall interest rate
that is charged on the client's loan? - ANSWERS-Spread + Cost of
Funds
Based on the following scenarios, choose which company's loan request
would have the least favorable loss given default score. - ANSWERS-
END OF
PAGE
2
, CFI CBCA CORE LATEST
COURSE EXAM
Company Y is requesting a loan to finance the acquisition of a smaller
company in their industry.
Which of the following is NOT part of the risk-adjusted return formula?
- ANSWERS-Capital Requirement
Which of the following is part of the risk-adjusted return formula? -
ANSWERS-Interest Revenue
Closing Fees
Exposure at Default
Using the following information, calculate the risk-adjusted return.
•Loan Amount: $10,000,000
•Interest Rate: 5.0%
•Cost of Funds: 2.75%
•Fees: 10,000
•Expenses: 5,000
•Loss Given Default Rate: 25%
•Default Probability: 0.5% - ANSWERS-= 217,500
END OF
PAGE
3
, CFI CBCA CORE LATEST
COURSE EXAM
Using the following information, calculate the risk-adjusted capital.
•Loan Amount: $10,000,000
•Capital Requirement: 12%
•Capital Ratio: 25% - ANSWERS-$300,000
Using the following information, calculate the RAROC.
•Risk-Adjusted Return: $80,000
•Loan Amount: $3,000,000
•Capital Requirement: 10%
•Capital Ratio: 75% - ANSWERS-35.56%
Which of the following was NOT discussed in this course within the
context of client negotiation levers? - ANSWERS-Loan Type
Which of the following was discussed in this course within the context
of client negotiation levers? - ANSWERS-All-in Rate
Amortization Period
Loan to Value
END OF
PAGE
4
