1. What is one of the most important writing rules to keep in mind when writing the credit application?

a. A credit analyst should aim to include as much detail in each section as possible to avoid leaving out any potential items that may affect the credit decision.

b. Any information presented should be concise, clear, well-structured, and relevant. Any redundant or irrelevant details should be left out.

c. The credit application should be written as if the audience was a regular person, avoiding any financial jargon.

d. The credit application should be structured in proper paragraphs as it is an official document.

2. Select ALL of the statements regarding environmental comments that are TRUE.

a. One of the goals of an environmental assessment is to identify how environmental hazards may impact the value of the property as collateral for the loan.

b. Environmental assessments need to be conducted if commercial real estate is taken to secure a loan.

c. Environmental due diligence should be conducted on companies whose operations create significant externalities around their properties.

d. Environmental risks and hazards are already factored into the value of the property, making environmental comments mostly redundant.

3. Stampedes financial growth is slowing down. Despite this, their credit application for a $5 million fixed-term loan was still approved. What does this tell us about the credit analysis process?

a. When a company is over-secured like in Stampedes case, it is acceptable to ignore findings from other sections of the credit application.

b. Growth is unimportant for the credit analysis process as long as the company expects to remain profitable going into the future.

c. Credit analysis evaluates the company holistically, looking at all factors that affect debt service, not just financial analysis.

d. The credit analysis process can sometimes miss details that would affect the credit decision. The approval recommendation for Stampedes credit application was incorrect.