1. The proper balance between risk and potential returns require the consideration of:
   1. structures of costs within an organization;
   2. sensitivity to market to marketing potential;
   3. the ability to interpret financial posture of customers;
   4. All of the above.

1. Banking relationships are important for an organization because:
   1. they provide organizations with the capacity to operate with minimal levels of cash
   2. they are the lubricant of business activity;
   3. they allow organizations to plan financial activities in the face of uncertainty;
   4. All of the above.

1. A lender will want to consider the following before making a fiscal commitment to an organization:
   1. The riskiness of his exposure by means of standard ratios computed on the basis of audited financial statements;
   2. The competence and tenure of the organization