Question: Question 3 Save Answer 6 points The Credit Officer at Real Bank has awarded a score to Joe Black based on information provided for

Question 3 Save Answer 6 points The Credit Officer at Real Bank has awarded a score to Joe Black based on information provided for each category considered for risk assessment relating to his application for a personal loan. The score awarded reflects the level of risk of default. The higher the score the lower is the risk. The lower the score the higher the risk. Joe is a relationship lending Customer with the Bank. Joe's tax rate is 20%. The maximum score (lowest risk) and the minimum score (highest risk) the Bank awards for each category are indicated. A score in between indicates Medium Risk. Risk Assessment Annual gross income Category Considered for Information given by Joe Score for Joe Maximum Minimum Black $45,000 Black Score Score 20 60 0 Total Debt Service 36 % 25 60 -10 Major credit cards 6 10 20 0 Age 20 10 30 5 Residence-Owned Information already 10 50 5 /Mortgaged/ or rented provided Credit history Missed a payment 2 0 40 -1 years ago Consider each category and information provided by Joe Black. Based on the score awarded by the Credit Officer: a. State whether it indicates high risk, medium risk or low risk. b. Explain briefly, the reason why you think the information provided by Joe for each category indicates the level of risk that you selected. c. Apart from the scorecard what other factors should Joe's Manager consider in evaluating Joe's application for a loan?

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