Besides Reducing Credit Risks, an FI Has an Incentive to Sell

question 42

Multiple Choice

Besides reducing credit risks, an FI has an incentive to sell loans it originates for all of the following reasons EXCEPT to:

• A)geographically diversify.
• B)decrease core deposits.
• C)lower reserve requirements.
• D)lower capital requirements.
• E)generate reinvestment income.

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Definitions:

Measure Of Central Tendency

A statistical concept that provides a single value as an estimate of the center of a distribution of values, commonly calculated as the mean, median, or mode.

Outlier

Numbers in a data set that are extreme values; calculate outliers in a data set by multiplying 1.5 times the IQR; subtract this product from Q1 to compute the boundary for lower outliers and add this value to Q3 to compute the boundary for upper outliers.

Average Bill

Refers to the mean amount charged for a service or product over a specified period, often used to estimate monthly or yearly expenses.

Linear Regression

A statistical method for modeling the relationship between a dependent variable and one or more independent variables by fitting a linear equation to observed data.