1. In talking about credit policy and the potential risk of a loan, we described liquidity, cashflow and collateral as all important elements in such an analysis. Which of these three is most important? Why? [5 pts]

1. We reviewed sample documents that banks use when evaluating the creditworthiness of a business borrower. Name two of them: [5 pts]

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2. Approximately what percentage of loans are typically past due payment? Stated differently, what percentage of loans a bank makes will go bad on average? [5 pts]
   1. <1%
   2. Between 1% & 3%
   3. Between 3% & 5%
   4. >5%

3. Fee income has become increasingly important to banks profitability. Name 3 examples of fee income for banks: