A.Which of the following is TRUE regarding management analysis?

1.A risk averse management team is preferred when evaluating the creditworthiness of a company.

2.Management analysis is critical when dealing with a high risk borrower.

3.The reputation of the management team should be evaluated by interviewing employees of the company.

B.Which of the following statements is TRUE regarding loan security?

A.An analyst should aim to secure a loan with one of each type of loan security.

B.Loan security protects the lenders claim against unforeseen and unfavorable events.

C.Financial institutions should always approve loans if the value of the security can cover the value of the loan.

D.It is unnecessary to take security if the company has a good history with the financial institution.

4.Management analysis is one of the most efficient and effective ways to evaluate a companys creditworthiness.