AIWMI Exam CCRA-L2 Topic 8 Question 88 Discussion

Actual exam question for AIWMI's CCRA-L2 exam

Question #: 88
Topic #: 8

[All CCRA-L2 Questions]

Provisioning Coverage Ratio (PCR) is essentially the ratio of provisioning to ______ and indicates the extent

of funds a bank has kept aside to cover loan losses.

Atotal loan portfolio

Bgross non-performing assets

Ctotal assets

Show Suggested Answer

Suggested Answer: B

by Earleen at May 20, 2024, 11:07 PM

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Sharika

1 years ago

Wait, is this a trick question? I bet the answer is a combination of all three - the bank needs to provision for their entire loan book, their non-performing assets, and their overall financial position. This is going to keep me up at night!

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Sabina

1 years ago

I'm going with total assets. It's the most comprehensive metric, right? The bank needs to have enough provisions to cover potential losses across their entire balance sheet.

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Caprice

1 years ago

I agree, total assets is the most comprehensive metric to consider when evaluating a bank's provisioning coverage ratio.

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Erick

1 years ago

Yes, total assets is the correct answer. It gives a more holistic view of the bank's ability to cover potential losses.

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Mirta

1 years ago

C) total assets

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Louisa

1 years ago

B) gross non-performing assets

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Nobuko

1 years ago

Exactly, total assets includes all assets held by the bank, giving a more comprehensive picture of their provisioning coverage.

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Glynda

1 years ago

Yes, total assets is the correct answer. It provides a broader view of the bank's ability to cover potential losses.

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Floyd

1 years ago

C) total assets

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Chun

1 years ago

B) gross non-performing assets

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Willodean

1 years ago

A) total loan portfolio

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Mel

1 years ago

C) total assets

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Wilbert

1 years ago

A) total loan portfolio

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Glen

1 years ago

A) total loan portfolio

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Desmond

1 years ago

Hmm, I think it's the ratio of provisioning to the total loan portfolio. That makes the most sense to me, since the bank needs to cover all their loans, not just the non-performing ones.

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Christiane

1 years ago

Yeah, that would ensure the bank has enough funds to cover all their loans.

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Rosendo

1 years ago

I agree, it does make sense that it's the total loan portfolio.

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Annamaria

1 years ago

PCR is definitely the ratio of provisioning to gross non-performing assets. I mean, how else would a bank know how much they've set aside to cover loan losses?

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Helene

1 years ago

B) gross non-performing assets

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Simona

1 years ago

A) total loan portfolio

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