1. Which of the following descriptions are factors that affect FICO scores?

0. A customer 1 delinquency record

1. A customer has $10,000 debt unpaid.

2. A customer is applying for 5 new credits.

3. A customer is younger than 30 years old.

4. A customer's credit history is less than 2 years.

A. 0, 1, 2, 3

B. 1, 2, 3, 4

C. All above

D. 0, 1, 2, 4

2. In assessing the key variables associated with a potential mortgage loan, a bank will charge a higher interest rate if the borrower has a relatively:

A. high FICO score

B. high loan-to-value ratio

C. low debt-to-assets ratio

D. low debt-to-income ratio

3. If the VaR on an asset is $1 million at a one-week, 95% confidence level. What is the correct interpretation of the VaR value?

A. There is a 5% chance that the asset value will drop more than $1 million in one week

B. There is a 95% chance that the asset value will drop more than $1 million in one week

C. There is a 95% chance that the asset will be higher than $1 million in one week

D. There is a 95% chance that the average value of the asset will be $1 million

4. Which of the following elements are key elements determining VaR of a Loan?

1 Specified level of loss in value

2 Time period over which risk is assessed

3 Confidence interval

4 The market value of the bank which issues the loan

A. 1, 2, 3

B. 1, 3, 4

C. All above

D. 2, 3, 4