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    6-Lending Opr Winter 2010

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    aimlessroamer
    This document contains sample questions from an examination on lending operations and risk management administered by the Institute of Bankers Pakistan. The questions cover topics such as loan classification requirements, consumer loan evaluation, pledge of goods as loan collateral, working capital loan analysis, the impact of discount rates on bank asset and liability pricing, and analysis of financial ratios. The questions are multiple choice or require explanations, calculations, or true/false responses.

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    6-Lending Opr Winter 2010

    Uploaded by

    aimlessroamer
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    This document contains sample questions from an examination on lending operations and risk management administered by the Institute of Bankers Pakistan. The questions cover topics such as loan classification requirements, consumer loan evaluation, pledge of goods as loan collateral, working capital loan analysis, the impact of discount rates on bank asset and liability pricing, and analysis of financial ratios. The questions are multiple choice or require explanations, calculations, or true/false responses.

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    This document contains sample questions from an examination on lending operations and risk management administered by the Institute of Bankers Pakistan. The questions cover topics such as loan classification requirements, consumer loan evaluation, pledge of goods as loan collateral, working capital loan analysis, the impact of discount rates on bank asset and liability pricing, and analysis of financial ratios. The questions are multiple choice or require explanations, calculations, or true/false responses.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    6 views2 pages

    6-Lending Opr Winter 2010

    Uploaded by

    aimlessroamer
    This document contains sample questions from an examination on lending operations and risk management administered by the Institute of Bankers Pakistan. The questions cover topics such as loan classification requirements, consumer loan evaluation, pledge of goods as loan collateral, working capital loan analysis, the impact of discount rates on bank asset and liability pricing, and analysis of financial ratios. The questions are multiple choice or require explanations, calculations, or true/false responses.

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    THE INSTITUTE OF BANKERS PAKISTAN

    ISQ Examination (Winter-2010) LENDING OPERATIONS AND RISK MANAGEMENT


    Q.1 Please write the alphabet of the selected choice in the answer column:

    Q.2

    State True or False in the answer column.

    Q.3

    Fill in the blanks:

    Q.4

    A)

    Why does the State Bank of Pakistan require the banks to classify their loans? What are the different categories of classification? Differentiate between time-based and subjective classifications. Which one would you prefer for your bank?

    B) C)

    Q.5

    A) B)

    What are the characteristics of consumer loans? Explain how you would evaluate consumer loan applications.

    Q.6

    A) B)

    What is meant by pledge of goods? Explain how you would safeguard interest of the bank when extending loan facilities against pledge of goods.

    Q.7

    Diamond Industries Limited has approached your bank for a working capital loan, and has submitted the following financial data: ASSETS Cash Accounts Receivable Inventory Fixed Assets Total Assets

    Rs 50,000 Rs 375,000 Rs 510,000 Rs 925,000 --------------Rs 1,860,000

    LIABILITIES & EQUITY Accounts Payable Accrued Expenses Notes Payable Current Maturity of Long Term Debt Long Term Debt Equity Total Equity & Liabilities

    Rs 166,000 Rs 37,000 Rs 75,000 Rs 25,000 Rs 475,000 Rs 1,082,000 --------------Rs 1,860,000

    Sales Cost of Goods Sold Operating Expenses Purchases

    Rs 4,622,800 Rs 3,504,100 Rs 893,000 Rs 3,116,000

    Required: A) What fraction of the firms assets is being funded with long-term debt or equity? B) Assuming a 365-day year, calculate the firms asset cash-to-cash cycle, liability cash-to-cash cycle, and days deficiency. C) Estimate the firms working capital needs. Show your working on the Answer Sheet. Q.8 Discount rate is determined from time to time by State Bank of Pakistan. How does it affect pricing of assets and liabilities of banks. What are the merits and demerits of the following high and low ratios: A) B) C) D) Current Ratio Quick Ratio Inventory Turnover Debit Equity Ratio

    Q.9

    -.-.-.-.-

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