Here are some MCQs on Lending Risks and Non-performing Assets
1. What is a non-performing asset (NPA)?
a) An asset that is not performing well
b) An asset that has defaulted in payments for more than 90 days
c) An asset that has been sold to a non-financial institution
d) An asset that has no market value
2. What is the primary risk associated with lending?
a) Credit risk
b) Market risk
c) Operational risk
d) Liquidity risk
3. Which of the following is a reason why borrowers may default on loans?
a) Unexpected economic downturn
b) Poor management decisions
c) Inaccurate credit scoring
d) All of the above
4. What is the purpose of loan classification?
a) To identify non-performing assets
b) To determine the interest rate on loans
c) To assess the borrower’s creditworthiness
d) To calculate the loan amount
5. Which of the following is a qualitative indicator of credit risk?
a) Debt-to-income ratio
b) Credit score
c) Business outlook
d) Collateral value
