If a Future Credit Crunch Occurs, a Loan Commitment May

question 62

Multiple Choice

If a future credit crunch occurs, a loan commitment may expose the FI to:

• A)credit risk
• B)interest rate risk
• C)sovereign country risk
• D)funding risk

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Definitions:

Potential Economic Value

The projected worth or economic benefit that an asset, investment, or business initiative is expected to generate in the future.

Making Links

The process of establishing connections or relationships between different concepts, entities, or individuals.

Concepts

Abstract ideas or general notions that exist in the mind as representations of something understood or imagined.

Habit-Breaking Strategies

Techniques or plans designed to help individuals break free from patterns or behaviors that are considered negative or unproductive.