Explanation

Answer Example

In a trading environment, I evaluate a borrower’s repayment ability by analyzing their trading history, leverage ratios, and cash flow stability. For example, I review their margin utilization and historical performance under volatile market conditions. Additionally, I use metrics like the debt-to-equity ratio and liquidity coverage ratio to assess their ability to handle adverse scenarios. Recently, I assessed a borrower during a market downturn and identified over-leverage risks, recommending tighter loan limits, which mitigated potential exposure to default. This approach ensures informed lending decisions in fast-paced markets.