Borrower Reputation Is Important in Assessing Credit Quality Because

question 96

Multiple Choice

Borrower reputation is important in assessing credit quality because

• A)good past payment performance perfectly predicts future behavior.
• B)preservation of a good customer/FI relationship acts as an additional incentive to encourage loan repayment.
• C)FIs only lend to customers they know.
• D)customers with poor credit histories always default on their loans.
• E)a reputation for honesty is important in credit appraisal.

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Definitions:

Regions of The Brain

Specific areas within the brain responsible for different functions, such as the frontal lobe for decision making or the occipital lobe for vision.

Pleasure

A feeling of happiness, enjoyment, or satisfaction derived from an experience or activity.

Alcohol

A psychoactive substance found in drinks such as beer, wine, and spirits, known to alter mood and behavior.

Marijuana

A psychoactive drug from the Cannabis plant used for medical or recreational purposes.