Assuming That a Credit Decision Has Been Analyzed and Credit

question 2

Multiple Choice

Assuming that a credit decision has been analyzed and credit refused due to a negative expected profit,which of the following changes,if of sufficient magnitude,might change the decision to one of approval?

• A) Increase the percentage of profit margin.
• B) Decrease the probability of payment.
• C) Increase the discount rate.
• D) Reduce the expected profit.

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Definitions:

Eroded Away

The process by which earth, rocks, or surface material are worn down and removed by the action of wind, water, or ice.

Butte

An isolated, steep-sided feature that rises above the surrounding landscape.

Angular Fragments

Pieces of rock or mineral that have sharp edges and pointy corners, typically resulting from mechanical weathering processes.

Tilted Rocks

Rocks that have been moved from their original horizontal position to a slanted orientation, typically as a result of tectonic forces.