A Weakness of Migration Analysis to Evaluate Credit Concentration Risk

question 65

Multiple Choice

A weakness of migration analysis to evaluate credit concentration risk is that the

• A)information obtained for this analysis is usually ex-post (i.e.after the fact).
• B)information obtained for this analysis is ex-ante (i.e.before the fact).
• C)analysis makes use of historical data classified only by industries.
• D)analysis makes use of historical data classified by individual firms.

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Definitions:

Government Financial Support

Monetary assistance provided by governmental bodies to organizations, individuals, or sectors, often aimed at stabilization, growth, or specific goals.

Fungible

A characteristic of goods, commodities, or assets that are equivalent and interchangeable, such as currency or certain commodities.

State Governments

The governing bodies of individual states in a federal system, responsible for local legislation, enforcement, and services within their territories.

Temporary Assistance

Short-term support or aid provided to individuals or organizations in need, often through government programs or non-profit organizations.