Quiz Space

Financial Forensics · End Term · 21 Dec 2025 · September 2025 term

Question 14: The Bankruptcy Bank, one of the major lending banks, has…

Question 14

+1 markOne correct option

The Bankruptcy Bank, one of the major lending banks, has hired you to build a credit underwriting model to help their automated lending decisions. Their definition of default is 60-89 DPD. There is historical loans data since January 1, 2021 till 31, July 2025. Which of the following is true – as of July 31, 2025?

  1. A

    Jan’21– Jul’25 is used for performance data

  2. B

    Apr’24 – Jul’25 is used for observation data

  3. C

    May’24 – Jun'25 is used for performance data

  4. D

    Jan’21 – Jan’25 is used for observation data

  5. E

    Jan’21 – Apr’25 is used for observation data

Show answer

Correct answer

  • E

    Jan’21 – Apr’25 is used for observation data

See the whole paperTake it as a mock test

Question 14 of 40 in the IIT Madras BS Financial Forensics (Financial Forensics) End Term paper sat on 21 Dec 2025, in the September 2025 term (Financial Forensics 18 Dec 25). It carries 1 mark.

More questions from this paper

  1. Q1Which of the following is a characteristic of a stationary time series?
  2. Q2A firm has net working capital of ₹ 580, net fixed assets of ₹ 2,326, sales of ₹ 6,900, and current liabilities of ₹ 89…
  3. Q3What is the relationship between the IRR and the cost of capital?
  4. Q4What is the Roll Forward rate for 0-29 DPD after 18 MOB?
  5. Q5What is the Capture Rate of applications having score greater than 384?
  6. Q6What is the Capture Rate of Bads at top 5%?
  7. Q7What is the Capture Rate of applications having score greater than 125?
  8. Q8What is the Roll Back rate for 150+ DPD after 18 MOB?
  9. Q9Secure Credit Union, one of the major lending banks, has hired you to build a credit underwriting model to help their a…
  10. Q10Which of the following is not used on approved applications?
  11. Q11Which of the following is the last step in credit lifecycle?
  12. Q12Which of the following is the first step in credit lifecycle?
  13. Q13What is the Roll Forward rate for 120-149 DPD after 18 MOB?
  14. Q15Stemming is faster than Lemmatization
  15. Q16Which of the following is not a text preprocessing technique?
  16. Q17Given the sentence: "Customer sign-up rates have increased by 25% in the last quarter." Output: ['customer', 'sign', 'u…
  17. Q18Which of the following is used to decide target variable definition?
  18. Q19In a credit risk scenario, if a model has high recall but low precision, it implies that:
  19. Q20If a model predicts the negative class for all observations in a binary classification problem with both positive and n…
  20. Q21Which scenario is likely to occur if a credit risk model is optimized solely for high recall?
  21. Q22Which of the following can be a consequence of not using reject inferencing in models dealing with credit applications?
  22. Q23Which of the following correctly describes the impact of collecting cash from customers for services to be provided in …
  23. Q24On April 1, 2024, the premium on a one-year insurance policy was purchased for \$2,700 cash with the insurance coverage…
  24. Q25Income taxes incurred but not yet paid at the end of the accounting period are examples of accrued expenses.
  25. Q26The retained earnings of Tink Company increased \227,500 last year and its assets increased \307,500. Tink declared a \…
  26. Q27Which of the following best explains the difference between local and global explainability in machine learning models?
  27. Q28In SHAP (SHapley Additive exPlanations) analysis, what is the base value?
  28. Q29According to Shapley value theory, which of the following is a desirable property that SHAP explanations satisfy?
  29. Q30From the waterfall plot shown below, identify the model's base value and final prediction: Figure 1: SHAP Waterfall Plot
  30. Q31Which of the following scenarios is best suited for using global explainability rather than local explainability?
  31. Q32A real estate developer offers an investment plan where buyers pay ₹15,00,000 upfront to own a property. The developer …
  32. Q33ABC Corporation operates in a volatile industry and has an equity beta (levered beta) of 2.2. Currently, the company is…
  33. Q34Two mutually exclusive projects have 3-year lives and a required rate of return of 10.5 percent. Project A costs ₹75,00…
  34. Q35Foremost Inc. has a net income of ₹ 29,600, a total asset turnover of 1.4, total assets of ₹ 3,18,600, and a debt-equit…
  35. Q36XYZ bank is interested in lending loans to companies and earn interest income from it. But at the same time they also w…
  36. Q37Stock A has an expected return of 12 percent and a variance of 0.0203. The market has an expected return of 11 percent …
  37. Q38The return on equity ratio is closest to:
  38. Q39Which of the following statements are True about Isolation Forest
  39. Q40A fintech company has a ML system that identifies transaction frauds that occur in its system. The model currently has …