8)When lenders are able to quantify their credit risks, they can use the output for all of the below, except:

Check the adequacy of their own capital position

Determine prototypes for new product introductions in the market

Determine the need to undertake portfolio level hedging strategies

Consider possibilities to sell existing loans from their books

Single choice

9)

A Director on the Board persuaded his organization to do business with a new customer and extend them credit terms. He didn't disclose to the Board that the new customer was owned by one of his friends and that he knew they were in financial difficulty. The new customer goes into liquidation having bought and taken delivery of SAR 1,000,000 of products and not paid for them. The Director didn't receive any financial inducement. The organization takes civil action against this Director. What do you think might be a likely outcome?

The Director committed fraud and is sentenced to 2 years in prison, fined SAR 500,000 and is disqualified from being a Director.

The Director has neglected their general duty of loyalty to the organization. Their Board position is terminated, they have to pay for the SAR 1,000,000 bad debt and are disqualified from being a Director

The Director has engaged in commercial activity that is in competition with a business activity. Their Board position is terminated and they are fined SAR 200,000 and disqualified from being a Director.

The Director has disclosed insider information concerning the company. Their Board position is terminated, they have to pay for the SAR 1,000,000 bad debt and are disqualified from being a Director