Loan Sales and Securitisation Are Increasingly Seen as Valuable Tools

question 71

Multiple Choice

Loan sales and securitisation are increasingly seen as valuable tools in the management of credit risk.Which of the following are not advantageous to FIs?

• A)Loan sales and securitisation allow FIs to better manage their customer relationships.
• B)Loan sales and securitisation create moral hazard issues and reduce scrutiny of off-balance-sheet activities of FIs.
• C)Loan sales and securitisation reduce FIs' industry and/or geographical concentration risk.
• D)Loan sales and securitisation allow FIs to separate their credit risk exposure from the lending process itself.

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Definitions:

Overcoming Objections

The process in sales of addressing and resolving any concerns or hesitations a potential customer might have about a product or service.

Objection

A concern or question raised by a prospect that needs to be addressed by a salesperson to move towards closing a sale.

Order

A request made by a customer for a specific product or service, initiating a transaction between buyer and seller.

Reseller Objection

Resistance or concerns expressed by a reseller or distributor, often related to product price, features, market demand, or terms of sales agreements.