CCM Professional Standards & Competencies 3

Question 1

A credit professional uses a scoring model that inadvertently discriminates against a protected class of applicants. Which professional standard is most directly violated?

Accepted Answer

Equal Credit Opportunity Act (ECOA) compliance obligations

Answer

The ECOA prohibits credit discrimination based on protected characteristics, and credit professionals are responsible for ensuring their models comply.

Question 2

Which of the following is an example of applying analytical competency in credit management?

Accepted Answer

Using Days Sales Outstanding (DSO) trends to identify portfolio risk shifts

Answer

Monitoring DSO trends is an analytical practice that allows credit professionals to detect emerging risks in their receivables portfolio.

Question 3

Which professional body provides the CCM designation and sets the standards for credit management in the United States?

Accepted Answer

National Association of Credit Management (NACM)

Answer

NACM is the primary professional organization that administers the CCM credential and establishes ethical and competency standards for credit managers.

Question 4

When a credit professional makes decisions that balance company profitability with prudent risk management, they are demonstrating:

Accepted Answer

Strategic business acumen

Answer

Strategic business acumen involves understanding and balancing the dual goals of generating revenue and protecting the company from excessive credit risk.

Question 5

Peer review among CCM holders serves what primary professional purpose?

Accepted Answer

To share best practices and maintain high standards across the profession

Answer

Peer review fosters a culture of shared knowledge and accountability, elevating the professional standards of the entire credit community.

(CCM) Certified Credit Manager Practice Test

(CCM) Certified Credit Manager Practice Test

CCM Professional Standards & Competencies 3