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AIWMI Exam CCRA-L2 Topic 6 Question 84 Discussion

Actual exam question for AIWMI's CCRA-L2 exam
Question #: 84
Topic #: 6
[All CCRA-L2 Questions]

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

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Suggested Answer: A

by Georgene at Apr 13, 2024, 01:03 PM

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Janet
11 months ago
Well, credit enhancement is meant to strengthen the credit profile of the borrower, so C) makes sense
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Elvis
12 months ago
But why do you think the answer is C)?
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Kattie
12 months ago
I'm not sure, but I think it could be B)
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Janet
12 months ago
Actually, I believe the answer is C)
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Elvis
12 months ago
I think the answer is A)
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Florinda
1 years ago
Yes, that makes sense. It's important to understand the purpose and impact of credit enhancements in financial transactions.
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Ettie
1 years ago
So, the correct answer is A) that credit enhancements do not deteriorate the overall credit worthiness of the borrower.
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Diane
1 years ago
Actually, credit enhancements can be provided by entities with stronger credit profiles to help benefit the fund raising entity.
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Josephine
1 years ago
I believe option C) is false, as credit enhancements are not necessarily provided by entities with stronger credit profiles.
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Fernanda
1 years ago
I agree, credit enhancements actually help improve the credit worthiness of the borrower by reducing default risk.
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Edda
1 years ago
I think the false statement is option A) that credit enhancements deteriorate the overall credit worthiness of the borrower.
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Leslie
1 years ago
Great, I think we've got it figured out. *chuckles* Although, I have to say, these exam questions can really be a minefield sometimes.
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Wilda
1 years ago
Yep, that's my understanding as well. Option A is the odd one out here.
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Virgie
1 years ago
Haha, no kidding! It's like they're trying to trick us. But hey, at least we're all in this together, right?
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Stefania
1 years ago
Yeah, that doesn't make sense. So, the correct statement is B) Credit enhancement could be implicit or explicit
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Kenneth
1 years ago
I think the false statement is 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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