In Making Credit Decisions, Which of the Following Items Is

question 77

Multiple Choice

In making credit decisions, which of the following items is considered a market-specific factor?

• A)Whether the borrower's capital structure is beyond the point where additional debt increases the probability of loss of principal or interest.
• B)Whether the relative level of interest rates will encourage the borrower to take excessive risks.
• C)Whether property can be pledged as collateral.
• D)Whether the volatility of earnings could present a period where the periodic payment of interest and principal would be at risk.
• E)Whether the record of the borrower is sufficient to create an implicit contract.

---

Definitions:

Schemata

Cognitive structures or frameworks that help organize and interpret information in the brain.

Imagined Elements

Components or aspects of thought that exist purely in the mind and are not based on actual sensory experiences or reality.

Repressed Memories

Memories that have been unconsciously blocked due to being associated with a high level of stress or trauma but may potentially be recovered.