AAFM Exam GLO_CWM_LVL_1 Topic 3 Question 62 Discussion

Actual exam question for AAFM's GLO_CWM_LVL_1 exam

Question #: 62
Topic #: 3

"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? "

A'Bank can retain Rs. 50,000. Balance Rs. 10,000 has to be paid to the borrower.'

BBank cannot sell the underlying security because its value is higher than loan.

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.'

Show Suggested Answer

Suggested Answer: B

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

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Marylyn

5 days 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

6 days ago

I disagree, I believe the correct answer is C.

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Marylyn

7 days ago

I think the answer is A.

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Rickie

7 days 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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Dolores

9 days 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

9 days 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

16 days ago

I disagree, I believe the correct answer is C.

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Dolores

18 days ago

I think the answer is A.

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