Which of the Following Statements Is True

question 59

Multiple Choice

Which of the following statements is true?

• A)Loan loss ratio based models rely on actual data and involve the estimation of the systematic loan loss risk of a particular industry relative to the loan loss risk of an FI's total loan portfolio.
• B)Loan loss ratio based models rely on historic data and involve the estimation of the systematic loan loss risk of a particular industry relative to the loan loss risk of an FI's total loan portfolio.
• C)Loan loss ratio based models rely on historic data and involve the estimation of the systematic loan loss risk of a particular borrower relative to the loan loss risk of an FI's total loan portfolio.
• D)Loan loss ratio based models rely on actual data and involve the estimation of the systematic loan loss risk of a particular borrower relative to the loan loss risk of an FI's total loan portfolio.

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Definitions:

Non-Current Assets

Assets that are expected not to be converted into cash within a year and are long-term resources of a company, such as property, plant, and equipment.

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Interest Paid

The total amount of interest payments made on any borrowed funds or debt over a specific period.

Operating Activities

Transactions and events that enter into the determination of net profit or loss, involving the primary revenue-producing activities of the enterprise and other activities that are not investing or financing activities.