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AIWMI Exam CCRA-L2 Topic 2 Question 91 Discussion

Actual exam question for AIWMI's CCRA-L2 exam
Question #: 91
Topic #: 2
[All CCRA-L2 Questions]

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

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Suggested Answer: A

by Marti at Jun 28, 2024, 09:56 PM

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Jenifer
1 months ago
Wait, is this a trick question? I'm going to have to go with C. Getting that external support is the whole point of credit enhancement, isn't it?
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Leigha
1 months ago
Ah, the old credit enhancement conundrum. I think A is the false statement here. Gotta keep those borrowers looking good, you know?
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Vallie
23 hours ago
User 3: Absolutely, A is the odd one out here. It's important to maintain the borrower's reputation.
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Merissa
8 days ago
User 2: Yeah, credit enhancement is all about improving the credit worthiness of the borrower.
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Denae
23 days ago
User 1: I agree, A is definitely false. We want to make sure the borrower looks good.
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Rosendo
1 months ago
I believe the correct answer is A) as well, because credit enhancements are meant to reduce risk for lenders, not deteriorate credit worthiness
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Galen
1 months ago
Haha, this question is a real brainteaser! I'm going to go with B. Credit enhancement can definitely be implicit or explicit, that's a no-brainer.
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Bulah
21 days ago
User 2: I agree, A is definitely false. It helps the lender by reducing risk.
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Aide
22 days ago
User 1: I think A is false. Credit enhancements actually reduce default risk.
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Ira
1 months ago
Hmm, I'm not sure about this one. But I'm pretty confident that C is the right answer. Credit enhancement is all about getting that external cash flow support, right?
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Graciela
10 days ago
Yes, you're correct. Credit enhancement is indeed about getting external cash flow support.
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Charlena
11 days 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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Maryann
17 days ago
B) Credit enhancement could be implicit or explicit
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Whitney
1 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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Magdalene
2 months ago
I agree with Annelle, because credit enhancements actually improve the credit worthiness of the borrower
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Dick
2 months ago
I think A is the correct answer. Credit enhancements actually improve the creditworthiness of the borrower, not deteriorate it. This is a tricky one!
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Carma
1 months ago
User 2: No, I believe it's actually B. Credit enhancements improve the creditworthiness of the borrower.
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Hyun
2 months ago
User 1: I think A is the correct answer.
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Annelle
2 months ago
I think the false statement is A)
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