What is cash? in terms beyond its monetary function What is the valuation and credit risk...
What is cash? in terms beyond its monetary function
What is the valuation and credit risk assessment for loans.
Homework Answers
1. Cash is a liquid asset and easily exchangeable. It can be measured, benchmarked and stored. Idle cash will not earn any income but is easily redeemable.
2. Valuation of loans refers to the actual exposure or leverage that can be monetised against any underlying. The equillibrium value justifiable to the lender and borrower at arms length.
credit risk refers to the bankruptcy proceeding of the borrower. Networth, leverage , liquidity of the borrower is accessed before sanctioning loan to measure the credit risk associated with the loan.
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What is cash? in terms beyond its monetary function
What is the valuation and credit risk...
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