Which of the Following Methods Measure Loan Concentration Risk by Tracking

question 6

Multiple Choice

Which of the following methods measure loan concentration risk by tracking credit ratings of firms in particular sectors or ratings class for unusual downgrades?

• A)Migration analysis.
• B)Concentration limits.
• C)Loan loss ratio-based model.
• D)Moody's Analytics portfolio manager model.
• E)Loan volume-based model.

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Definitions:

X-Coordinate

The horizontal value in a coordinate system, representing the distance along the x-axis from the origin.

Y-Coordinate

The vertical position or value in a coordinate system, representing the distance from the x-axis in a 2-dimensional space.

Volume

Refers to the amount of space that a substance or object occupies, or that is enclosed within a container.

Centre of Gravity

A concept in geography and supply chain management used to find the best location for a service or distribution center by minimizing transportation costs, considering the locations of suppliers, customers, and goods.