Capital One Assessment Test Applied Techniques 2

Question 1

A credit card portfolio has 12,000 accounts. If 3.5% become delinquent and 40% of delinquent accounts are eventually charged off, how many accounts are charged off?

Accepted Answer

168

Answer

12,000 × 0.035 = 420 delinquent; 420 × 0.40 = 168 charge-offs.

Question 2

A bar chart shows monthly loan originations (in thousands): Jan=45, Feb=38, Mar=52, Apr=49. What is the average monthly origination?

Accepted Answer

46

Answer

(45+38+52+49)/4 = 184/4 = 46.

Question 3

A scatter plot shows customer credit scores on the x-axis and default rates on the y-axis. The correlation is −0.78. What does this indicate?

Accepted Answer

Higher credit scores are strongly associated with lower default rates

Answer

A correlation of −0.78 is a strong negative relationship, meaning higher scores predict lower defaults.

Question 4

An analyst must compare two loan products. Product A has an APR of 18.9% and Product B has a monthly rate of 1.65%. Which has the higher annual cost?

Accepted Answer

Product B

Answer

Product B's annual rate ≈ 1.65% × 12 = 19.8%, which exceeds Product A's 18.9%.

Question 5

A team is prioritizing three risk reduction projects. Project X reduces losses by $500K at a cost of $200K. Project Y reduces losses by $300K at a cost of $80K. Project Z reduces losses by $700K at a cost of $350K. Ranked by ROI (highest first), the order is:

Accepted Answer

Y, X, Z

Answer

Y ROI=275%, X ROI=150%, Z ROI=100% — order is Y, X, Z.

Capital One Assessment Test Practice Test

Capital One Assessment Test Practice Test

Capital One Assessment Test Applied Techniques 2