6. What is collateral in lending?
a) The interest charged on a loan
b) The amount of money borrowed
c) An asset pledged to secure a loan
d) The repayment period of a loan
7. Which of the following is an example of secured lending?
a) Personal loan
b) Credit card debt
c) Mortgage loan
d) Student loan
8. What does the loan-to-value (LTV) ratio measure?
a) The borrower’s ability to repay the loan
b) The borrower’s creditworthiness
c) The collateral’s value compared to the loan amount
d) The borrower’s income level
9. What is the primary purpose of stress testing in lending?
a) To assess the borrower’s creditworthiness
b) To evaluate the bank’s capital adequacy
c) To determine the interest rate on loans
d) To calculate the loan amount
10. What is forbearance in lending?
a) Providing relief or leniency to borrowers facing financial difficulties
b) Selling non-performing assets to recover funds
c) Increasing the interest rate on loans
d) Tightening the lending criteria
