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ABA CRCM Practice Test - Questions Answers

List of questions

Question 1

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This is a loan term or an arrangement that modifies a loan term under which a bank agrees to cancel all or part of a customer's loan obligation on the occurrence of a specified event. It may be included as a part of the loan documents, or it may be a separate agreement. What is it?

Debt suspension agreement (DSA)
Debt suspension agreement (DSA)
Anti-dying
Anti-dying
Debt cancellation contract (DCC)
Debt cancellation contract (DCC)
ALLL
ALLL
Suggested answer: C
asked 16/09/2024
Ruud God
36 questions

Question 2

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Short-form disclosures are required in advertisements and promotional materials unless the advertisements and promotional materials are of:

A general nature describing or listing the products or services offered by the bank
A general nature describing or listing the products or services offered by the bank
A specific nature describing or listing the products or services offered by the bank
A specific nature describing or listing the products or services offered by the bank
A general nature describing or special services offered by the bank
A general nature describing or special services offered by the bank
A general nature describing competitive advantage of the bank
A general nature describing competitive advantage of the bank
Suggested answer: A
asked 16/09/2024
Sanaa CHOKIRI
45 questions

Question 3

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How is the maximum loan value of margin stock defined?

As a percentage of the amount to be loaned
As a percentage of the amount to be loaned
As a percentage of the book value of the stock
As a percentage of the book value of the stock
As a percentage of the current market value of the stock
As a percentage of the current market value of the stock
As a percentage of the good-faith loan value of the stock
As a percentage of the good-faith loan value of the stock
Suggested answer: C
asked 16/09/2024
Winston Seedorf
31 questions

Question 4

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If a bank makes a loan that is in compliance with Regulation U, what will be the status of the loan at its consummation?

The loan will be in compliance until it is renewed, regardless of the reduction of the borrower's equity in the stock.
The loan will be in compliance until it is renewed, regardless of the reduction of the borrower's equity in the stock.
The loan will be in compliance only if the value of the stock remains within the margin requirements.
The loan will be in compliance only if the value of the stock remains within the margin requirements.
The loan will be in compliance unless the status of the stock changes (for example, margin or nonmargin)
The loan will be in compliance unless the status of the stock changes (for example, margin or nonmargin)
The loan will always be in compliance until its maturity, regardless of the reduction of the borrower's equity in the stock, provided there are no substitutions or withdrawals that adversely affect the loan value.
The loan will always be in compliance until its maturity, regardless of the reduction of the borrower's equity in the stock, provided there are no substitutions or withdrawals that adversely affect the loan value.
Suggested answer: D
asked 16/09/2024
Ismaiel Al-Mufleh
47 questions

Question 5

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Which of the following is NOT included in the definition of margin stock?

Stock traded on a national securities exchange
Stock traded on a national securities exchange
Nonmargin stock convertible to margin stock
Nonmargin stock convertible to margin stock
Debt securities convertible to margin stock
Debt securities convertible to margin stock
Warrants to purchase margin stock
Warrants to purchase margin stock
Suggested answer: B
asked 16/09/2024
Stergios Gaidatzis
38 questions

Question 6

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First National Bank has made three loans to Mrs. Elmwood. Two of the loans are regulated credits (they are for the purpose of purchasing margin stock and secured by margin stock). The third loan is for the purpose of purchasing margin and nonmargin stock, and the loan is secured by real estate and margin stock. Can the bank avoid having the third loan combined with the other two for Regulation U purposes?

Yes, but the real estate must have a value of at least twice as much as the third loan.
Yes, but the real estate must have a value of at least twice as much as the third loan.
No. At least the part of the loan attributable to the security of margin stock must be treated as a regulated credit and combined with the other two loans.
No. At least the part of the loan attributable to the security of margin stock must be treated as a regulated credit and combined with the other two loans.
No. All of the third loan must be combined with the others.
No. All of the third loan must be combined with the others.
Yes. As long as there is any other collateral, the loan will not be a regulated credit.
Yes. As long as there is any other collateral, the loan will not be a regulated credit.
Suggested answer: B
asked 16/09/2024
Donald Bell
31 questions

Question 7

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For which of the following must a bank obtain Form FR U-1 when a loan is in excess of $100,000?

A loan made to purchase margin stock
A loan made to purchase margin stock
A loan secured by margin stock
A loan secured by margin stock
A loan made to purchase margin stock and secured by margin stock
A loan made to purchase margin stock and secured by margin stock
A loan secured by stock (either margin or nonmargin)
A loan secured by stock (either margin or nonmargin)
Suggested answer: B
asked 16/09/2024
Ajay Vijayan
34 questions

Question 8

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First National Bank made the following loans to Mr. James Wilson during the previous calendar year:

* Loan A, made on February 2, is a loan for purchasing margin stock and is secured by margin stock

* Loan B, made on March 15, is also for purchasing margin stock and is secured by margin stock

* Loan C, made on June 30, is an unsecured loan for purchasing margin stock

* Loan D, made on September 10, is for purchasing a car, secured by the car

All the loans are still outstanding at the end of the year. Which of the loans must be combined for purposes of the margin requirements of Regulation U?

All of the loans must be combined
All of the loans must be combined
Loans A and B
Loans A and B
None of the loans must be combined
None of the loans must be combined
Loans A, B, and C
Loans A, B, and C
Suggested answer: D
asked 16/09/2024
jateen chibabhai
41 questions

Question 9

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First National Bank has made a loan to Mr. Good, secured by margin stock, to purchase margin stock. He trades stocks frequently, makes substitutions on loan collateral regularly, and sometimes withdraws collateral and does not replace it. Must FNB ensure that margin requirements are met after every substitution and withdrawal?

Yes. The margin requirements must be met at all times.
Yes. The margin requirements must be met at all times.
No. If the margin requirements were met when the loan was made, there are no further requirements.
No. If the margin requirements were met when the loan was made, there are no further requirements.
No. The bank is only required to ensure that withdrawals do not violate margin requirements; collateral substitutions are not covered.
No. The bank is only required to ensure that withdrawals do not violate margin requirements; collateral substitutions are not covered.
No. In this case the margin requirement must be met only when the loan is renewed.
No. In this case the margin requirement must be met only when the loan is renewed.
Suggested answer: A
asked 16/09/2024
soufiane chafik
40 questions

Question 10

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Is the renewal of a loan considered to be a new extension of credit for purposes of valuing the collateral under Regulation U?

Yes
Yes
Yes, if any additional amounts are added to the loan balance
Yes, if any additional amounts are added to the loan balance
Yes, if any amounts other than interest, service charges, or taxes are added to the loan balance
Yes, if any amounts other than interest, service charges, or taxes are added to the loan balance
No, a renewal is never considered to be a new credit
No, a renewal is never considered to be a new credit
Suggested answer: C
asked 16/09/2024
Said Bouzardaoui
38 questions
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