Commercial Banking Application Quiz!
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Banks are our second-biggest client group in the US and Australia.
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True
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False
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The 'Commercial Banking Application Quiz!' assesses knowledge on bank-client relationships, commercial bank activities, and risk management using IBISWorld reports. It's designed for professionals to enhance loan diversification and support decision-making in commercial banking.
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- 2.
What is the best description of how IBISWorld Industry Reports help large banks?
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They know local, but we provide the industry component
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We help identify high-risk industries in their classification
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We provide a local market and relationship focus
Correct Answer
A. We help identify high-risk industries in their classificationExplanation
IBISWorld Industry Reports help large banks by assisting them in identifying high-risk industries within their classification. These reports provide valuable insights and analysis on various industries, helping banks assess the potential risks associated with lending or investing in specific sectors. By identifying high-risk industries, banks can make more informed decisions and mitigate potential financial risks.Rate this question:
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- 3.
Which of the following is the best description of how IBISWorld helps Commercial Banks to deliver more diversified loans?
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Support Credit Analysts with industry information to help approve or deny a loan (e.g. through Industry Report & Risk Ratings)
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Ensuring the bank is not overexposed to too many related industries (e.g. through Industry Wizard)
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Support Relationship Managers with questions to ask loan applicants about their industries (e.g. through iExpert Summaries)
Correct Answer
A. Ensuring the bank is not overexposed to too many related industries (e.g. through Industry Wizard)Explanation
IBISWorld helps Commercial Banks to deliver more diversified loans by ensuring that the bank is not overexposed to too many related industries through the use of the Industry Wizard. This feature helps banks assess the level of risk associated with lending to specific industries and prevents them from concentrating too much of their loan portfolio in a single sector. By avoiding overexposure, banks can spread their risk and improve the overall stability of their loan portfolio.Rate this question:
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- 4.
Complete the following sentence: IBISWorld helps Commercial Banks to support their Relationship Managers, Credit Analysts, and Loan Officers to create more loans, better loans, and more _ _ _ _ _ _ _ _ _ _ _ loans.
Correct Answer
diversifiedExplanation
IBISWorld helps Commercial Banks to support their Relationship Managers, Credit Analysts, and Loan Officers to create more loans, better loans, and more diversified loans. This means that IBISWorld provides assistance to these professionals in order to generate a wider range of loans, which helps to minimize risk and increase the bank's profitability. By offering a variety of loan options, Commercial Banks can cater to the diverse needs of their customers and ensure a more balanced loan portfolio. This ultimately leads to a more sustainable and successful lending strategy for the bank.Rate this question:
- 5.
IBISWorld can help Loan Officers/Relationship Managers at Commercial Banks. Which IBISWorld product is best suited to providing Loan Officers with fast facts and targeted questions across many verticals?
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Risk Reports
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Industry Reports
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Industry Wizard
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IExpert
Correct Answer
A. IExpertExplanation
iExpert is the best-suited IBISWorld product for Loan Officers/Relationship Managers at Commercial Banks because it provides them with fast facts and targeted questions across many verticals. iExpert is a comprehensive database that offers detailed industry information, including key statistics, trends, and analysis. This allows Loan Officers to quickly access the necessary information and ask relevant questions to make informed lending decisions.Rate this question:
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- 6.
IBISWorld can help Commercial Banks with Business Development. Which IBISWorld product would be most useful to a bank looking to quickly identify industries in the Growth Stage of their Life Cycle, with low Barriers to Entry and medium to high Capital Intensity?
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IExpert
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Industry Wizard
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Industry Reports
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Business Environment Profiles
Correct Answer
A. Industry WizardExplanation
The Industry Wizard would be the most useful IBISWorld product for a bank looking to quickly identify industries in the Growth Stage of their Life Cycle, with low Barriers to Entry and medium to high Capital Intensity. The Industry Wizard provides comprehensive industry data and analysis, including information on industry life cycles, barriers to entry, and capital intensity. It allows banks to quickly and easily identify industries that meet their specific criteria, helping them in their business development efforts.Rate this question:
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- 7.
Credit Scorecards use data to attempt to provide a quantitative measure of the probability that a customer will default. Which IBISWorld product is best suited to provide a Commercial Bank with data to input into the Credit Scorecard system?
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Business Environment Report
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Industry Reports
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Risk Reports
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IWizard
Correct Answer
A. Risk ReportsExplanation
Risk Reports are best suited to provide a Commercial Bank with data to input into the Credit Scorecard system. Risk Reports provide detailed information about the potential risks associated with specific industries or companies. This information can be used to assess the probability of a customer defaulting and to make more informed decisions about lending. By analyzing the data in Risk Reports, the Commercial Bank can input relevant information into the Credit Scorecard system and improve the accuracy of its predictions.Rate this question:
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- 8.
IBISWorld can help Commercial Banks with Portfolio/Risk Management. Which IBISWorld Industry Report section would be most useful to a Commercial Bank that wants to map industry families to identify potential issues from buy-side or sell-side?
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Business Locations
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Capital Intensity
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Industry Globalization
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Supply Chain
Correct Answer
A. Supply ChainExplanation
The Supply Chain section of the IBISWorld Industry Report would be most useful to a Commercial Bank that wants to map industry families and identify potential issues from buy-side or sell-side. This section provides information on the interconnected relationships between different industries, including suppliers, customers, and competitors. By understanding the supply chain dynamics, a Commercial Bank can assess the potential risks and opportunities associated with specific industries and make informed decisions regarding portfolio and risk management.Rate this question:
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- 9.
IBISWorld developed the Industry Risk Rating product through a partnership with which not-for-profit organization?
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Consumer Bankers' Association
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Professional Risk Manager's International Association
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Global Association of Risk Professionals
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Risk Management Association
Correct Answer
A. Risk Management AssociationExplanation
IBISWorld developed the Industry Risk Rating product through a partnership with the Risk Management Association. This organization is a not-for-profit association that focuses on promoting effective risk management practices in the business industry. By partnering with the Risk Management Association, IBISWorld was able to leverage their expertise and industry knowledge to develop a comprehensive and reliable risk rating product for their customers.Rate this question:
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- 10.
Which of the following is the least appropriate question to ask a prospective Commercial Banking client?
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How do you identify new business opportunities?
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How do your recruiters keep abreast with industry trends and developments?
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How do you identify which industries require additional due diligence?
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How do you monitor the bank's loan portfolio?
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What benchmarking data do you use to test the validity of a client’s business plan?
Correct Answer
A. How do your recruiters keep abreast with industry trends and developments?Explanation
This question is the least appropriate because it is not directly related to commercial banking. It focuses on the client's internal recruitment practices rather than their banking needs and preferences. The other questions are more relevant to understanding the client's business and banking requirements.Rate this question:
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- 11.
Which of the following position types do we target when prospecting a Commercial Bank? Mark all five that apply.
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Chief Credit Officer
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Head of Business Banking
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Knowledge Center
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Head of Commercial Banking
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Investment Analyst - Global Equities
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Chief Economist
Correct Answer(s)
A. Chief Credit Officer
A. Head of Business Banking
A. Knowledge Center
A. Head of Commercial Banking
A. Chief EconomistExplanation
The correct answer includes Chief Credit Officer, Head of Business Banking, Knowledge Center, Head of Commercial Banking, and Chief Economist. These positions are targeted when prospecting a Commercial Bank because they are key decision-makers and influencers in the bank's credit, business banking, commercial banking, and economic departments. The Chief Credit Officer is responsible for overseeing the bank's credit policies and approving loans. The Head of Business Banking and Head of Commercial Banking are responsible for managing relationships with business clients and driving business growth. The Knowledge Center provides research and insights to support the bank's decision-making. The Chief Economist provides economic analysis and forecasts to guide the bank's strategies.Rate this question:
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- 12.
Underwriters work on a commission basis, so they have added incentive to approve a loan. True or False?
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True
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False
Correct Answer
A. FalseExplanation
Underwriters do not work on a commission basis. Their role is to assess the risk associated with a loan application and determine whether it meets the lender's criteria. Their decision is based on objective factors such as the applicant's creditworthiness and ability to repay the loan, rather than any financial incentive. Therefore, the statement that underwriters have added incentive to approve a loan is false.Rate this question:
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- 13.
Information for this question can be found in the Commercial Banks Key Sections table in the Technical Manual. The Key Statistics section of an Industry Report is most likely to be used by which roles/areas of a Commercial Bank?
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Marketing
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Credit/Risk Analyst
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Library
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Research Analyst/Economics
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Business Development
Correct Answer(s)
A. Marketing
A. Credit/Risk Analyst
A. Research Analyst/Economics
A. Business DevelopmentExplanation
The Key Statistics section of an Industry Report is most likely to be used by Marketing, Credit/Risk Analyst, Research Analyst/Economics, and Business Development roles/areas of a Commercial Bank. These roles/areas require access to key statistical data and analysis to make informed decisions regarding marketing strategies, credit and risk assessment, economic research, and business development opportunities.Rate this question:
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- 14.
This question relates to the following testimonial from Centrue Bank: "How We Help: • Key reports and sections: iExpert, Competitive Landscape, Market Share Concentration, Risk Rating Reports. • Better client relationships: Understanding real world risks in the industry and asking appropriate questions makes the banker appear knowledgeable to customers. • Risk-balancing portfolio: Use Risk Ratings to look at the concentration of their loan portfolio and develop their own risk whitepaper for internal use." After viewing the testimonial, which two Industry Report chapters appear to have been particularly useful to Centrue?
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Risk Ratings Reports
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Market Share Concentration
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IExpert
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Competitive Landscape
Correct Answer(s)
A. Market Share Concentration
A. Competitive LandscapeExplanation
The testimonial states that Centrue Bank uses key reports and sections such as iExpert, Competitive Landscape, Market Share Concentration, and Risk Rating Reports to help them in their work. However, it specifically mentions that understanding real world risks in the industry and asking appropriate questions makes the banker appear knowledgeable to customers, which suggests that the Market Share Concentration and Competitive Landscape chapters would be particularly useful to Centrue in understanding industry risks and improving client relationships.Rate this question:
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- 15.
Basel III was developed largely in response to the credit crisis and builds on Basel I and Basel II to improve banks’ ability to absorb shocks from financial and economic stress. What is the main influence of Basel III?
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More capital required to set aside to cover risks
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Limits to balance sheets and increased disclosure
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Standards in monitoring liquidity – all banks need to pass a 30-day stress test
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All of the above
Correct Answer
A. All of the aboveExplanation
Basel III was developed in response to the credit crisis and aims to improve banks' ability to handle financial and economic stress. It includes multiple measures to achieve this goal. Firstly, it requires banks to set aside more capital to cover risks, which enhances their financial stability. Secondly, it imposes limits on balance sheets and increases disclosure, promoting transparency and reducing excessive risk-taking. Lastly, it establishes standards for monitoring liquidity, requiring all banks to pass a 30-day stress test. Therefore, all of the above options are correct influences of Basel III.Rate this question:
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Quiz Review Timeline (Updated): Mar 20, 2023 +
Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.
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Current Version
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Mar 20, 2023Quiz Edited by
ProProfs Editorial Team -
Jul 14, 2016Quiz Created by
Damian Mills
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