Exam Task
Exam Task
Exam Task
1. Jacob works as a loan manager for JSC "Big Bank". The monthly salary is EUR 2100, -.
Performance bonuses are paid to Jacob regularly at 10% of salary. Linda works as a sales
manager at JSC Computer logistics”, her salary EUR 1450, -. The family has 2 children. Jacob has
a consumer loan at the bank. 2 years ago borrowed EUR 8 000, - at a rate of 11%, the loan is due
for another year. The family wants to buy a new car using leasing services. The price of a car is
35 000, - EUR. A 15% first deposit has been collected. Leasing terms - financial lease term 5
years, % rate 2.5% per annum, linear repayment schedule. The livelihood calculated by the
leasing company for one person is EUR 450, -. Evaluate the family's ability to repay the leasing.
Evaluate the possibility to grant the leasing by using CAMPARI method.
2. Company A sells machinery to company B for EUR 328500, -, delivery date 10.03.2020, payment
term 10.09.2020. The factoring threshold is EUR 350 000, -. The factoring company pays 85% of
the invoice value. The interest rate on factoring is 6% per annum. The commission for servicing
the factoring is 1.5% of the value of each invoice. Create a factoring scheme and make
calculations. Please describe benefits of using a factoring for a Company A.
3. What types of loan security can you mention? How are banks using loan security in case the
borrower has problems to repay the loan?
4. Exchange rate types - SPOT, FORWARD. Describe the difference and comment on possibilities of
use of each type of exchange rate. When it is more advisable for the company to use SPOT and
FORWARD exchange rate.
5. Payment instruments. What are they and what are their characteristics?
Answers:
1.by using method of CAMPARI I would like to say which following actions Jacob should to do.
The principles it outlines are used by banks and investors worldwide. It’s an easy way of making sure that
you are fully prepared when you apply for any business finance – maximising your chance of securing the
funds you need.
Banks risk taking loans. The more they are confident in your ability to deliver, the more likely you are to
get the capital you need. Naturally, supposedly he should dress and act as a professional and not be late.
Communicate well with the head of your bank and show that you are a capable business leader. And he
should be ready to show evidence of a good trading history and the ability to provide quality services to
customers, making a profit.
Jacob should be unambiguous when he tells the bank why capital is needed and how he can afford
payments. There is no room for ambiguity. Bank managers cannot clearly see how they will receive the
money back, and therefore consider the application too risky. Presenting his case, it should be obvious
how he will repay the loan; use illustrations or get an accountant if necessary. Bank managers must be
sure that they will comply with the repayment conditions, otherwise the application will be rejected. And
I’m ready to show significant documentation regarding profit, cash flow forecasts and other key financial
information. including that he is a banker, he knows what he includes for these processes. Do not
exaggerate forecasts or profits. Jacob will need a backup plan to ensure that he can still repay the loan if
he receives a less than satisfactory return. He will receive proper insurance where necessary, and will
take measures to diversify income streams to ensure that you will still make a profit if the loan capital
cannot return the profit.
And I think it this version is too suitable in order to quit all problems of Jacob. Ive tried to describe my
opinion to solve exercise by using CAMPARI method as much as I can.
2,
35000*85%=297500
297500*6%=17850
350000*1,5%=5250
17850+5250=23100
efficiency in sourcing new customers using up-to date credit information and experience
high liquidity with increasing bargaining power and discounts from your suppliers
Many of us have taken loans to finance some of life’s major events: buying the family
car, becoming homeowners, marrying off a family member, or paying for a medical
emergency. Taking a loan helps us circumvent our lack of large sums of liquid cash.
And, we pay back the loan with interest, in EMIs. Sometimes, because of
circumstances beyond our control, we are unable to repay our loans in a timely
manner. Inability to repay a loan for a prolonged period leads to the deterioration of
the relationship between the borrower and the lender. This is usually a bank or a
Non-banking Financial Company (NBFC). Such a situation needs active management.
You must understand what consequences loan defaults will have. Money owed
should be repaid eventually, but let’s take a look at your rights as a loan defaulter,
and how you can set the situation right.
4. forward rate and spot rate are different prices, or quotes, for different contracts. A spot rate is a
contracted price for a transaction that is taking place immediately (it is the price on the spot). A forward
rate, on the other hand, is the settlement price of a transaction that will not take place until a
predetermined date in the future; it is a forward-looking price. Forward rates typically are calculated based
on the spot rate.
5. Payment instruments and schemes are an essential part of payment systems. Cards,
credit transfers, direct debits and e-money are non-cash payment instruments with which
end users of payment systems transfer funds between accounts at banks or other financial
institutions.
Providing and using payment instruments generally does not generate systemic risk.
However, these instruments should be safe and efficient to maintain confidence in the
currency and promote an efficient economy.
This is why the Eurosystem includes payment instruments in central bank oversight of
payment systems.