Which of the Following Is a Way to Reduce the Risk

question 44

Multiple Choice

Which of the following is a way to reduce the risk of standby credit letters?

• A)Avoid renegotiating the terms of loans of SLC customers
• B)Specialize in SLCs issued by the same region and industry
• C)Selling participations in standbys in order to share risk with other lending institutions
• D)Do not count standbys as loans when assessing the bank's risk exposure
• E)All the options are ways to reduce the risk of standby credit letters

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Definitions:

Reciprocity

A mutual exchange of privileges or services between two parties where each benefits from the agreement.

Industrial Buying Practice

The systematic process that organizations use to make purchase decisions regarding raw materials, processed materials, or professional services.

Products and Services

Goods that are manufactured or created for sale, and activities or benefits offered for consumption, respectively.