1. Which of the following statements does NOT reflect credit decisions at the retail level?
Loans to retail customers are more likely to be rationed through interest rates than loan quantity restrictions.
Most loan decisions at the retail level tend to be accept or reject decisions.
Mortgage loans often are discriminated based on loan to price ratios rather than interest rates.
Household borrowers require higher costs of information collection for lenders.
Retail loans tend to be smaller than wholesale loans.
2. In concept, the RAROC measure indicates a loan is acceptable if the RAROC is greater than the
borrower's return on equity.
lender's return on assets.
borrower's return on assets.
lender's return on equity.
Cost of funding the loan.