Determining the Applicant's Ability to Repay a Loan by Examining

question 35

Multiple Choice

Determining the applicant's ability to repay a loan by examining the amount of cash and marketable securities and the projected cash flows is which of following five C's?

• A) Capacity
• B) Capital
• C) Competency
• D) Character

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Definitions:

Corporate Duties

Responsibilities and obligations that members of a corporation, typically directors and officers, are required to follow in the interest of the corporation.

Business Judgment Rule

A legal principle that protects the decisions of corporate officers and directors when they act in good faith and with a reasonable basis in belief of acting in the best interest of the corporation.

Liability

A legal responsibility or obligation, typically involving financial compensation for loss or damage caused to another party.

Corporate Officer

An individual holding an executive position within a corporation, often vested with specific powers and responsibilities by the bylaws or board of directors.