Credit Risk

question 43

Multiple Choice

Credit risk:

• A) is the risk of a borrower defaulting on a loan.
• B) occurs when one party to a transaction has more information than the other.
• C) is the amount a borrower must pay in interest over the term of a loan.
• D) is the risk of not being able to qualify for a loan.

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Definitions:

Cohort Effect

Similarities in behavior among a group of peers that stem from the fact that group members are approximately the same age.

Cultural Heritage

The traditions, languages, knowledge, and artifacts passed down through generations in a particular group or society.

John Locke

A 17th-century English philosopher known for his work in political philosophy and epistemology, who argued that the mind is a tabula rasa at birth.

Tabula Rasa

A hypothesis positing that people are born with minds like blank slates, and all understanding is derived from experiences or sensory input.