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AAFM GLO_CWM_LVL_1 Exam - Topic 3 Question 62 Discussion

"A borrower defaults on a secured loan of Rs. 50,000. The underlying security is worth Rs. 60,000. Which of the following is true? "
B) Bank cannot sell the underlying security because its value is higher than loan.
A) 'Bank can retain Rs. 50,000. Balance Rs. 10,000 has to be paid to the borrower.'
C) 'Bank can retain the entire Rs. 60,000'
D) 'The excess of Rs. 10,000 has to be shared equally between the bank and the borrower.'

AAFM GLO_CWM_LVL_1 Exam - Topic 3 Question 62 Discussion

Actual exam question for AAFM's GLO_CWM_LVL_1 exam
Question #: 62
Topic #: 3
[All GLO_CWM_LVL_1 Questions]

"A borrower defaults on a secured loan of Rs. 50,000. The underlying security is worth Rs. 60,000. Which of the following is true? "

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Suggested Answer: B

by Nu at May 29, 2023, 06:17 AM

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Tiera
9 months ago
B is wrong, the bank can sell the security if needed.
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Lisandra
9 months ago
Wait, can the bank really keep all Rs. 60,000? That seems off.
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Yuriko
9 months ago
I disagree, the bank can’t just keep everything.
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Latosha
9 months ago
A is correct! The borrower gets Rs. 10,000 back.
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Latrice
9 months ago
The loan was Rs. 50,000, security is Rs. 60,000.
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Tatum
10 months ago
I’m confused about whether the bank can sell the security if it’s worth more than the loan amount. I need to think this through.
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Melita
10 months ago
I feel like the bank can only keep what it lent out, so maybe option A is correct?
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Jennie
10 months ago
I think I saw a similar question where the bank had to return excess funds to the borrower, but I can't recall the exact details.
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Nu
10 months ago
I remember discussing how secured loans work, but I'm not sure if the bank can keep the entire value of the security.
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Micah
10 months ago
Okay, let's see. I think the key here is understanding how the management plane DCN connects to the network elements (NEs). I'll need to review my notes on that.
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Tasia
10 months ago
Hmm, the prompt mentions "complimenting parentheses" - I'm not sure exactly what that means, but I'll try to think through the options logically.
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Danilo
10 months ago
This seems straightforward. Based on the total cost concept, I'd say the correct answer is inventory carrying costs, since that's a major logistics expense to factor in when selecting a transportation mode.
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Lilli
10 months ago
This looks like a straightforward question about stationary points. I'm pretty confident I can identify the correct answer.
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Verda
10 months ago
This scenario kind of reminds me of a practice question where we talked about vehicle safety features. The added airbags could complicate things, but the driver's visibility being impacted seems more like a design risk than a product risk.
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Desiree
1 year ago
This question is making my head spin. I need to take a break and do some yoga to clear my mind before tackling the next one.
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Mignon
1 year ago
D) The excess of Rs. 10,000 has to be shared equally between the bank and the borrower.
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Thomasena
1 year ago
I think the bank can retain the entire Rs. 60,000.
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Loise
1 year ago
C) Bank can retain the entire Rs. 60,000
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Socorro
1 year ago
A) Bank can retain Rs. 50,000. Balance Rs. 10,000 has to be paid to the borrower.
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Lamonica
1 year ago
Hold up, if the security is worth more than the loan, can the borrower just take the bank out for a fancy dinner with the extra cash? Asking for a friend.
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Leslee
1 year ago
C) Bank can retain the entire Rs. 60,000
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Amira
1 year ago
No, the bank can keep the extra amount from the security.
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Rashad
1 year ago
A) Bank can retain Rs. 50,000. Balance Rs. 10,000 has to be paid to the borrower.
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Meaghan
1 year ago
I don't know, Option D sounds like the most equitable solution. The excess should be shared between the bank and the borrower.
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Lynda
1 year ago
I agree, Option D seems fair. Sharing the excess between the bank and the borrower makes sense.
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Adela
1 year ago
C) Bank can retain the entire Rs. 60,000
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Dustin
1 year ago
A) Bank can retain Rs. 50,000. Balance Rs. 10,000 has to be paid to the borrower.
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Marylyn
1 year ago
But the loan amount is only Rs. 50,000, so the bank should be able to retain the entire Rs. 60,000.
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Annamae
1 year ago
I disagree, I believe the correct answer is C.
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Marylyn
1 year ago
I think the answer is A.
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Rickie
1 year ago
Wait, so the bank can just keep the entire security even though it's worth more than the loan? That seems a bit unfair to the borrower.
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Lanie
1 year ago
The excess of Rs. 10,000 has to be shared equally between the bank and the borrower.
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Harley
1 year ago
Wait, that doesn't seem fair to the borrower at all.
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Rikki
1 year ago
Bank can retain the entire Rs. 60,000
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Val
1 year ago
A) Bank can retain Rs. 50,000. Balance Rs. 10,000 has to be paid to the borrower.
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Wilford
1 year ago
But shouldn't the borrower get back the excess amount if the security is worth more?
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Elfriede
1 year ago
It's to ensure the bank is fully compensated for the defaulted loan.
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Billy
1 year ago
C) Bank can retain the entire Rs. 60,000
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Lettie
1 year ago
Wait, the bank can only keep the amount of the loan? That doesn't seem fair to them.
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Vernell
1 year ago
A) Bank can retain Rs. 50,000. Balance Rs. 10,000 has to be paid to the borrower.
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Levi
1 year ago
A) Bank can retain Rs. 50,000. Balance Rs. 10,000 has to be paid to the borrower.
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Dolores
1 year ago
But the security is worth more than the loan amount, so the bank should be able to retain the entire Rs. 60,000.
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Cortney
1 year ago
Option C is the correct answer. The bank can retain the entire Rs. 60,000 since the borrower has defaulted on the loan.
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Alethea
1 year ago
I disagree, I believe the correct answer is C.
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Dolores
1 year ago
I think the answer is A.
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