UCE (Economic Finance) EXAM 2
PRACTICE QUESTIONS WITH VERIFIED
SOLUTIONS RATED A.
There is no restriction on how many times a debtor may file Chapter 11.
A. True
B. False
A. True
A loan should be placed on nonaccrual if it is 90 days past due when it is:
A. well secured and in process of collection
B. only well secured
C. residential RE
D. an installment loan
B. only well secured
A loan is considered well secured if:
A. it is secured by RE
B. there is a current appraisal
C. the collateral is sufficient to discharge the debt
D. if the collateral is in good condition
C. the collateral is sufficient to discharge the debt
In determining when a loan is "in the process of collection", a 30-day
collection period has generally been applied. Is this 30-day collection
period intended as a benchmark or as an outer limit?
A. benchmark
B. outer limit
,C. the benchmark is 90 days
D. the outer limit is 90 days
A. benchmark
According to OCC guidance, considerations in assessing collectibility do
not include:
A. the financial condition of the borrower
B. borrower's equity in the underlying collateral
C. the process of near-term cash flow
D. banker intuition
D. banker intuition
A bank takes a partial charge off on a loan because it believes that part of
the obligation will ultimately be uncollectible. The loan is also placed on
nonaccrual status. One year later, with two years remaining in the loan
term, the borrower's financial condition improves dramatically. The loan is
brought contractually current, and the bank now fully expects to collect the
original contractual obligation, including the amount previously charged
off. Can the loan be returned to accrual status?
A. yes
B. no
C. yes, only if RE collateral
D. cannot be determined
A. yes; Call Report instructions
What is OCC's policy on the reversal of interest?
A. reverse all interest when loan is placed on nonaccrual
B. do not reverse interest
C. reverse only the interest that is expected to be uncollectible
D. reverse principal
A. reverse all interest when loan is placed on nonaccrual
,A bank may recognize interest on a cash basis (ie cash interest payments
may be treated as interest income) as long as the book balance of the loan
is deemed:
A. uncollectible
B. recognizable
C. fully collectible
D. measurable
C. fully collectible
Which of the following would generally result in placing all loans to a
particular borrower on nonaccrual?
A. they are all classified
B. the same source of repayment
C. they are guaranteed by the same individual
D. bankruptcy
B. the same source of repayment
In Examiner View, an examination may not be added to the strategy of a
bank once the strategy has been built for the upcoming supervisory cycle.
A. True
B. False
B. False
In Examiner View, the only people who can open an exam are the
portfolio manager or someone with Office View.
A. True
B. False
B. False
All violations must be entered in EV, not just those included in the ROE.
, A. True
B. False
A. True; EV Handbook; EIC checklist
Independent trust banks must pay the General Assessment fee as well as
an
additional Independent Trust Bank Assessment fee.
A. True
B. False
A. True; OCC Bulletin 2002- 44
A national bank may appeal the asset quality rating as presented in its
most recent final OCC report to the Ombudsman for review.
A. True
B. False
C. Only if the bank has a composite rating of "3"
D. Only if the bank has assets in excess of $500MM
A. True; OCC Bulletin 2002-9
A shared national credit is any loan or loan commitment with an original
amount of $20MM or more and 1.) is shared by three or more unaffiliated
and supervised institutions under a formal lending agreement or 2.) a
portion of which is sold to two or more unaffiliated and supervised
institutions with the purchasing institutions assuming their pro rata share
of the credit risk.
A. True
B. False
C. True, but the amount must be $15MM, not $20MM
D. True, but the amount does not matter if the other criteria are met
A. True; PPM 5100 -2
PRACTICE QUESTIONS WITH VERIFIED
SOLUTIONS RATED A.
There is no restriction on how many times a debtor may file Chapter 11.
A. True
B. False
A. True
A loan should be placed on nonaccrual if it is 90 days past due when it is:
A. well secured and in process of collection
B. only well secured
C. residential RE
D. an installment loan
B. only well secured
A loan is considered well secured if:
A. it is secured by RE
B. there is a current appraisal
C. the collateral is sufficient to discharge the debt
D. if the collateral is in good condition
C. the collateral is sufficient to discharge the debt
In determining when a loan is "in the process of collection", a 30-day
collection period has generally been applied. Is this 30-day collection
period intended as a benchmark or as an outer limit?
A. benchmark
B. outer limit
,C. the benchmark is 90 days
D. the outer limit is 90 days
A. benchmark
According to OCC guidance, considerations in assessing collectibility do
not include:
A. the financial condition of the borrower
B. borrower's equity in the underlying collateral
C. the process of near-term cash flow
D. banker intuition
D. banker intuition
A bank takes a partial charge off on a loan because it believes that part of
the obligation will ultimately be uncollectible. The loan is also placed on
nonaccrual status. One year later, with two years remaining in the loan
term, the borrower's financial condition improves dramatically. The loan is
brought contractually current, and the bank now fully expects to collect the
original contractual obligation, including the amount previously charged
off. Can the loan be returned to accrual status?
A. yes
B. no
C. yes, only if RE collateral
D. cannot be determined
A. yes; Call Report instructions
What is OCC's policy on the reversal of interest?
A. reverse all interest when loan is placed on nonaccrual
B. do not reverse interest
C. reverse only the interest that is expected to be uncollectible
D. reverse principal
A. reverse all interest when loan is placed on nonaccrual
,A bank may recognize interest on a cash basis (ie cash interest payments
may be treated as interest income) as long as the book balance of the loan
is deemed:
A. uncollectible
B. recognizable
C. fully collectible
D. measurable
C. fully collectible
Which of the following would generally result in placing all loans to a
particular borrower on nonaccrual?
A. they are all classified
B. the same source of repayment
C. they are guaranteed by the same individual
D. bankruptcy
B. the same source of repayment
In Examiner View, an examination may not be added to the strategy of a
bank once the strategy has been built for the upcoming supervisory cycle.
A. True
B. False
B. False
In Examiner View, the only people who can open an exam are the
portfolio manager or someone with Office View.
A. True
B. False
B. False
All violations must be entered in EV, not just those included in the ROE.
, A. True
B. False
A. True; EV Handbook; EIC checklist
Independent trust banks must pay the General Assessment fee as well as
an
additional Independent Trust Bank Assessment fee.
A. True
B. False
A. True; OCC Bulletin 2002- 44
A national bank may appeal the asset quality rating as presented in its
most recent final OCC report to the Ombudsman for review.
A. True
B. False
C. Only if the bank has a composite rating of "3"
D. Only if the bank has assets in excess of $500MM
A. True; OCC Bulletin 2002-9
A shared national credit is any loan or loan commitment with an original
amount of $20MM or more and 1.) is shared by three or more unaffiliated
and supervised institutions under a formal lending agreement or 2.) a
portion of which is sold to two or more unaffiliated and supervised
institutions with the purchasing institutions assuming their pro rata share
of the credit risk.
A. True
B. False
C. True, but the amount must be $15MM, not $20MM
D. True, but the amount does not matter if the other criteria are met
A. True; PPM 5100 -2
