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AIWMI Exam CCRA-L2 Topic 6 Question 93 Discussion

Actual exam question for AIWMI's CCRA-L2 exam
Question #: 93
Topic #: 6
[All CCRA-L2 Questions]

Which of the following is false in case of credit enhancements?

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Suggested Answer: A

Contribute your Thoughts:

Leila
3 months ago
I'm just here for the free snacks. Whoever gets this right deserves a raise!
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Latia
3 months ago
B) Credit enhancement could be implicit or explicit
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Aja
3 months ago
A) It reduces the default risk of the borrowing entity for the lender, thereby deteriorating the overall credit worthiness of the borrower
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Stefania
3 months ago
This question is a real head-scratcher! Maybe the answer is 'all of the above' and the exam is just trying to trick us.
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Larae
3 months ago
C) Credit enhancement is a mechanism whereby external cash flows is extended by an entity which has a stringer credit profile, so that it benefits the fund raising entity
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Argelia
3 months ago
B) Credit enhancement could be implicit or explicit
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Martina
3 months ago
A) It reduces the default risk of the borrowing entity for the lender, thereby deteriorating the overall credit worthiness of the borrower
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Jamal
4 months ago
Hold on, I'm pretty sure option C is false. Doesn't credit enhancement involve the borrowing entity getting external support, not the other way around?
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Jenelle
4 months ago
I'm not sure, but I think option B is the one that's false. Credit enhancement is always explicit, right?
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Sylvia
3 months ago
I agree with Sylvia, option C is definitely not false. It's option A that is incorrect.
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Lizette
3 months ago
I disagree, I believe option C is the false statement. Credit enhancements can be implicit or explicit.
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Vincenza
3 months ago
I think option A is false. Credit enhancements actually reduce default risk.
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Cory
3 months ago
I agree with Cory. Option C is definitely not false. Credit enhancements can involve external cash flows.
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Valene
4 months ago
I disagree. I believe option C is the false statement. Credit enhancements can be implicit or explicit.
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Daren
4 months ago
I think option A is false. Credit enhancements actually reduce default risk.
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Yuriko
4 months ago
I believe the false statement is A) because credit enhancements actually improve the credit worthiness of the borrower
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Bettyann
4 months ago
I agree with Lavera, A) seems incorrect
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Lavera
4 months ago
I think the false statement is A)
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Tabetha
4 months ago
Hmm, I think option A is the correct answer. Credit enhancement is supposed to improve the creditworthiness of the borrowing entity, not deteriorate it.
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Shaun
4 months ago
Yeah, credit enhancement is meant to reduce default risk, not increase it.
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Cristy
4 months ago
I agree, option A seems to be the correct answer.
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