CREDIT RISK MANAGEMENT DECEMBER 2023 PAST PAPER

TUESDAY: 5 December 2023. Afternoon Paper. Time Allowed: 3 hours.

This paper has seven (7) questions. Answer any FIVE questions. ALL questions carry equal marks. Do NOT write anything on this paper.

QUESTION ONE

1.  Differentiate between “written-down loan” and “charged-off loan”. (4 marks)

2. Discuss FOUR components of credit risk rating. (8 marks)

3.  Evaluate FOUR limitations of SWOT analysis as a tool of risk assessment. (8 marks)

(Total: 20 marks)

 

QUESTION TWO

1.  Outline FOUR types of external risks, that are worth noting in credit risk assessment. (4 marks)

2. Summarise THREE types of structural industrial risks. (6 marks)

3. Describe FIVE stages of industry life cycle. (10 marks)

(Total: 20 marks)

 

QUESTION THREE

1. Explain the term “Risk assessment matrix”. (2 marks)

Identify FOUR advantages of a risk assessment matrix. (4 marks)

3. List SIX characteristics of a good credit risk management culture. (6 marks)

4. Examine FOUR needs of working capital, that a credit risk analyst should consider. (8 marks)

(Total: 20 marks)

 

QUESTION FOUR

1. State FOUR dimensions of analysing risk in a credit transaction. (4 marks)

2. Highlight FOUR benefits of credit scoring. (8 marks)

3. Assess FOUR features of a risk management framework in an organisation. (8 marks)

(Total: 20 marks)

 

QUESTION FIVE

1.  Enumerate FOUR elements of an effective credit monitoring system. (4 marks)

2. Explain FOUR methods of identifying business risks. (8 marks)

3.  Summarise FOUR functions of a credit committee. (8 marks)

(Total: 20 marks)

 

QUESTION SIX

1. State FOUR categories of credit risk according to the level of probability. (4 marks)

2.  Discuss FOUR types of political risks of interest to credit managers. (8 marks)

3. One of the best ways to understand an economy is to study the National Income (NI) or Gross National Product (GDP), usually expressed as:
Y = C + I + G + (X – M).

Required:
Explain FOUR independent variables in the above equation in relation to credit risk analysis. (8 marks)

(Total: 20 marks)

 

QUESTION SEVEN

1. Outline SIX practices that could point to weaknesses in credit risk management systems. (6 marks)

2.List SIX public disclosure requirements for financial institutions. (6 marks)

3. Propose FOUR elements of a self-examination program for credit risk management. (8 marks)

(Total: 20 marks)

(Visited 8 times, 1 visits today)
Share this:

Written by