46. What is the purpose of stress testing in lending risk management?
a) To evaluate the borrower’s creditworthiness
b) To assess the bank’s capital adequacy under adverse scenarios
c) To determine the interest rate on loans
d) To increase the loan approval rate
47. How does credit history impact lending risks?
a) A positive credit history reduces lending risks
b) A negative credit history reduces lending risks
c) Credit history has no impact on lending risks
d) Credit history only affects the loan amount
48. What is a loan write-off in lending risk management?
a) Setting aside funds to cover potential loan losses
b) Selling non-performing assets to recover funds
c) Forgiving or canceling a loan that is deemed unrecoverable
d) Restructuring the terms and conditions of a loan
49. How does the quality of loan underwriting impact lending risks?
a) Higher quality underwriting increases lending risks
b) Higher quality underwriting reduces lending risks
c) Loan underwriting has no impact on lending risks
d) Loan underwriting only affects the interest rate
50. What is the purpose of loan recovery in lending risk management?
a) Recovering funds from non-performing assets
b) Setting aside funds to cover potential loan losses
c) Selling non-performing assets to recover funds
d) Restructuring the terms and conditions of a loan
