What are the purposes of credit scoring models? How do these models assist an FI manager to better administer credit?
Answer to relevant QuestionsHow does an FI evaluate its credit risks with respect to consumer and small business loans?What are conditions precedent?Suppose that the financial ratios of a potential borrowing firm took the following values: X1 = Net working capital/Total assets = 0.10, X2 = Retained earnings/Total assets = 0.20, X3 = Earnings before interest and taxes/ ...An FI is planning to give a loan of $ 5,000,000 to a firm in the steel industry. It expects to charge an up-front fee of 0.10 percent and a service fee of 5 basis points. The loan has a maturity of 8 years. The cost of funds ...How is a DI’s distribution pattern of net deposit drains affected by the following?a. The holiday season. b. Summer vacations. c. A severe economic recession. d. Double- digit inflation.
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