Besides Reducing Credit Risks, an FI Has an Incentive to Sell

question 42

Multiple Choice

Besides reducing credit risks, an FI has an incentive to sell loans it originates for all of the following reasons EXCEPT to:

• A)geographically diversify.
• B)decrease core deposits.
• C)lower reserve requirements.
• D)lower capital requirements.
• E)generate reinvestment income.

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Definitions:

Organization Size

A measure of the scale of an organization, typically based on the number of employees, the extent of its operations, or its market reach.

Geographical Location

The specific physical place where something is situated, often described in terms of latitude, longitude, and other geographical markers.

ERG Theory

A theory developed by Clayton Alderfer that categorizes human needs into three groups: Existence, Relatedness, and Growth, serving as an extension of Maslow's hierarchy of needs.

Need For Achievement

A psychological drive that motivates individuals to attain success and excellence in their endeavors.