1. A credit rating is an opinion of a particular credit agency regarding the ability and willingness an entity (government, business, or individual) to ulfil its financial obligations in completeness and within the established due dates. Discuss any FIVE (5) importance of credit policy for corporate. ( 25 marks)

2. a) Credit rating agencies (CRAs) play a key role in financial markets by helping to reduce the informative asymmetry between lenders and investors, on one side, and issuers on the other side, about the creditworthiness of companies or countries. There are currently two rating agencies in Malaysia that are approved by Securities Commission Malaysia – RAM Rating Services Berhad (RAM Ratings) and Malaysian Rating Corporation Berhad (MARC). Discuss the standard credit rating table used by Malaysia agency. (10 marks)

b) Explain any FIVE (5) functions of credit rating by providing examples.  (15 marks)

3. You are as a Credit Control Manager of a Construction Company and have been instructed by your superiors to come out with a new credit policy for the subsidiaries. You need to provide information needed for the companies to implement this new policy next year. The following information is required of the new subsidiary company: 

a) Name of the company

b) Background of the company 

c) Board of Directors

d) Product or Services provided 

e) Organizational Chart 

f) Credit Management Policies 

g) Product or Services provided 

Hint: You may choose any construction industry. You can use information / data from a public listed company that you can find at Bursa Malaysia website as a reference. 

Answer rating: 100% (QA)

Ans 1 A credit policy is a set of guidelines that mentions the credit conditions and payment terms for customers and also gives a clear course of action in case of late payments Importance of credit p... View the full answer