International Diversification of Loans Can Best Reduce a Bank's Overall

question 7

Multiple Choice

International diversification of loans can best reduce a bank's overall credit risk if

• A)the loans are made in countries in a single continent.
• B)the loans are made in countries whose economic cycles do not move together over time.
• C)the loans are made in countries in a single continent AND  the loans are made in countries whose economic cycles do not move together over time.
• D)None of these are correct.