8010 Exam Dumps | When considering a request for a loan from a retail customer, which of the following factors is relevant

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PRMIA.8010.v2022-06-27.q87
Question 12

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Question 12/87

When considering a request for a loan from a retail customer, which of the following factors is relevant for a bank to consider:

A. The other retail loans inits portfolio

B. The credit worthiness of the retail customer

C. The contribution this new loan would bring to total portfolio risk

D. All of the above

Correct Answer: D

Explanation
The credit worthiness of the retail customer is certainly a factor for thebank to consider as it will need to price the loan to cover the expectation of default. At the same time, it will need to look at other loans in its portfolio as to avoid unacceptable concentration risk. A corollary of the same theme is that the bank willneed to take a portfolio view of the loan request and consider its contribution to total portfolio risk. Therefore all the choices are appropriate considerations for the bank and Choice 'd' is the correct answer.

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