BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Undervaluation of the assets
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The act of taking on a risk for a fee
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Giving a Guarantee that a loan will not become a bad loan
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The act of permission to float an IPO
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Detailed explanation-1: -Definition: Underwriting is one of the most important functions in the financial world wherein an individual or an institution undertakes the risk associated with a venture, an investment, or a loan in lieu of a premium. Underwriters are found in banking, insurance, and stock markets.
Detailed explanation-2: -Underwriting is the process through which an individual or institution takes on financial risk for a fee. Underwriters assess the degree of risk of insurers’ business.
Detailed explanation-3: -Underwriting is the process of assessing the amount of risk you present to a potential insurer. Professional underwriters review the criteria on your application to see if it’s possible to offer you a policy and, if so, how much coverage you’re eligible for. Then, they set your monthly premium based on the information.
Detailed explanation-4: -What Is an Underwriter? An underwriter is any party, usually a member of a financial organization, that evaluates and assumes another party’s risk in mortgages, insurance, loans, or investments for a fee in the form of a commission, premium, spread, or interest.