Exam (elaborations)
CMCP CHAPTER 5 EXAM 2024/2025
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CMCP CHAPTER 5 EXAM 2024/2025
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CMCP CHAPTER 5 EXAM 2024/2025Credit - Precise Answer ✔✔a contractual agreement in which a
borrower receives something of value now and agrees to repay the
lender at some date in the future, generally with interest
five Cs of credit - Precise Answer ✔✔a system used by lenders to gauge
the creditworthiness of potential borrowers. The system weighs five
characteristics of the borrower and conditions of the loan
character, capacity, capital, collateral, and conditions - Precise Answer
✔✔What are the five Cs of credit
Character - Precise Answer ✔✔It refers to credit history: a borrower's
reputation or track record for repaying debts. This information appears
on the borrower's credit reports
Credit reports - Precise Answer ✔✔_________ contain detailed
information about how much an applicant has borrowed in the past and
whether they have repaid loans on time. These reports also contain
information on collection accounts and bankruptcies, and they retain
most information for seven to 10 years.
Capacity - Precise Answer ✔✔measures the borrower's ability to repay a
loan by comparing income against recurring debts and assessing the
borrower's debt-to-income (DTI) ratio.
, Capital - Precise Answer ✔✔is the money personally invested by the
debtor in a business and is an indication of how much risk it has as well
as the chance that the business will fail.
collateral - Precise Answer ✔✔can help a borrower secure loan. It gives
the lender the assurance that if the borrower defaults on the loan, the
lender can get something back by repossessing the ________
Conditions - Precise Answer ✔✔Refers to interest rate and amount of
principal, influence the lender's desire to finance the borrower. It can
also refer to how a borrower intends to use the money
credit application - Precise Answer ✔✔The first activity in the Credit
Department as it starts the actual operation of its function is the
__________
True - Precise Answer ✔✔True or False. To guide the credit applicant,
it would be good practice to give a listing of all the company
requirements upon his signifying his intention to apply for such a credit
accommodation or loan
Articles of Partnership - Precise Answer ✔✔One of the needed
documents for partnership that is duly registered with the Securities &
Exchange Commission (SEC)
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