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

question 30

Multiple Choice

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

• A) the countries where loans are given are clustered together in a single continent.
• B) the countries where loans are given have economic cycles that do not move together over time.
• C) A and B
• D) none of the above

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Definitions:

Allergy

An immune system reaction to a foreign substance (allergens) that is not typically harmful to the body.

Slight Fever

A minor elevation in body temperature, often indicating the presence of an infection or illness.

Muscle Aches

Discomfort or pain within the muscle tissue, often resulting from overexertion, tension, or a physical condition.

Common Cold

A viral infectious disease of the upper respiratory tract characterized by symptoms such as sneezing, sore throat, and runny nose.