Which statement correctly describes the relationship between loan repayment source and loan structure?

Select one:

a.the source of repayment determines the loan structure

b.the source of repayment determination comes after the loan has been properly structured

c.the loan structure and source of repayment are unrelated

d.the loan structure is not important if a loan is fully collateralized with liquid assets

Which option presents the primary source of repayment for most commercial loans?

Select one:

a.the liquidation of fixed assets provided as collateral

b.the willingness and capacity of the borrower

c.the rental income from non-owner-occupied property

d.the liquidation of current assets provided by the borrower

Which option typically is the secondary source of repayment for a mortgage loan?

Select one:

a.conversion of current assets

b.liquidation of fixed assets

c.liquidation of current assets

d.conversion to construction loan

Which aspect of collateral viability relates to the fact that some assets lose value more rapidly than others?

Select one:

a.liquidity

b.cost to liquidate

c.dependability

d.marketability

In which situation is a personal guarantee typically classified as a secondary source of repayment?

Select one:

a.the guarantor appears to have more financial strength than the collateral of the borrower

b.the collateral of the borrower appears to have more value than the financial strength of the guarantor

c.the primary source of repayment is excess operating cash flow from multiple operating cycles of the business

d.the guarantor appears to have more financial strength than the operating cash flow of the borrower

Which characteristic of collateral is defined as the ease with which the collateral can be converted to cash?

Select one:

a.dependability of value

b.marketability

c.liquidity

d.controlability

Which type of collateral is typically associated with issues such as concentration, internal control, and invoicing?

Select one:

a.marketable securities

b.inventory

c.receivables

d.plant and equipment

Which intangible asset can be reported on a firm's balance sheet strictly because, or as a result of, a merger or acquisition involving that firm?

Select one:

a.patents

b.goodwill

c.trademarks

d.copyright

Which viability and valuation factor is represented by the ability of the borrowing business to track its inventory?

Select one:

a.seasonal products

b.internal controls

c.ownership

d.obsolescence

How does a business banker measure the willingness of the guarantor to support a borrowing business?

Select one:

a.by accurate tax returns

b.by previous examples

c.by dependence of personal financial condition on the financial condition of the borrowing business

d.by the likelihood of legal challenges