Which of the Following Would Increase the Risk of a Loan

question 34

Multiple Choice

Which of the following would increase the risk of a loan?

• A) Rising consumer prices
• B) A short time to maturity
• C) Lower consumer prices
• D) Constant interest rates
• E) A good credit rating

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Definitions:

Standard Normal

A normal distribution with a mean of zero and a standard deviation of one, commonly used in statistical analyses.

Mean

The arithmetic average of a set of values or measurements, calculated by summing them all up and dividing by the number of values.

Standard Deviation

A statistic that measures the dispersion or variability of a set of data points relative to its mean.

Normal Distribution

A bell-shaped frequency distribution curve where most of the occurrences take place near the mean and fewer and fewer occur as one moves away from the mean.