If There Are a Few Borrowers in the Pool That

question 12

Multiple Choice

If there are a few borrowers in the pool that are significant in size relative to the entire pool balance, this diversification benefit can be lost, resulting in a higher level of credit risk referred to as ________.

• A) focus risk.
• B) concentration risk.
• C) concentric risk.
• D) intensity risk.

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Definitions:

IQR

Interquartile Range, a measure of statistical dispersion being the difference between the upper and lower quartiles.

Stem-And-Leaf

A graphical method used to display quantitative data in order to assist in visualizing its distribution.

Skewed

A statistical term describing a distribution that is not symmetrical, with a longer tail on one side of the peak than on the other.

Class Size

The number of students in a classroom setting, which can influence the learning environment and educational outcomes.