Which of the Following Statements Is True

question 5

Multiple Choice

Which of the following statements is true?

• A)If many loans have negative correlations of returns the sum of the individual credit risks of loans viewed independently exactly estimates the risk of the whole portfolio.
• B)If many loans have negative correlations of returns the sum of the individual credit risks of loans viewed independently underestimates the risk of the whole portfolio.
• C)If many loans have positive correlations of returns the sum of the individual credit risks of loans viewed independently overestimates the risk of the whole portfolio.
• D)If many loans have negative correlations of returns the sum of the individual credit risks of loans viewed independently overestimates the risk of the whole portfolio.

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Definitions:

Account Type

A classification that determines the features and rules applied to a financial or service account, such as savings, checking, or investment accounts.

Collections

The process or practices involved in pursuing payments of debts owed by individuals or businesses.

Initial Call

The first contact or communication, often referring to the early stages of a process or relationship.

Patient

An individual receiving medical care or treatment from healthcare professionals.