Which of the Following Is NOT a Contractual Mechanism Used

question 89

Multiple Choice

Which of the following is NOT a contractual mechanism used by FIs to control credit risks?

• A)Diversifying across different types of risky borrowers.
• B)Requiring higher interest rate spreads for higher risk borrowers.
• C)Requiring more collateral for the bank over the assets of more risky borrowers.
• D)Making lending decisions only in centralized locations.

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Definitions:

Chair Conformer

A stable, three-dimensional conformation of cyclohexane characterized by a shape resembling a chair, minimizing steric strain and torsional strain.

α-D-Glucopyranose

An alpha anomer of glucose in its cyclic form, where the hydroxyl group at the anomeric center is in the axial position.

Pyranose Forms

The six-membered oxygen-containing heterocyclic forms of monosaccharides or sugars.

Monosaccharide

The simplest form of carbohydrates, consisting of a single sugar molecule, such as glucose or fructose.