Which of the Following Observations Concerning Concentration Limits Is Not

question 22

Multiple Choice

Which of the following observations concerning concentration limits is not true?

• A)Limits are set by assessing the borrower's current portfolio, its operating unit's business plans, its economists' economic projections, and its strategic plans.
• B)FIs set concentration limits to reduce exposures to certain industries and increase exposures to others.
• C)When two industry groups' performances are highly correlated, an FI may set an aggregate limit of less than the sum of the two individual industry limits.
• D)FIs may set aggregate portfolio limits or combinations of industry and geographic limits.
• E)Bank regulators in recent years have limited loan concentrations to individual borrowers to a maximum of 30 percent of a bank's capital.

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Definitions:

Southern Strategy

A Republican Party electoral strategy to increase political support among white voters in the South by appealing to racism against African Americans.

Richard Nixon

The 37th President of the United States, serving from 1969 to 1974, known for ending American involvement in Vietnam and for his resignation following the Watergate scandal.

Civil War

A war between citizens of the same country, often characterized by intense, internal conflict over political, social, or economic issues.

Modern Republican Party

Refers to the contemporary iteration of the Republican Party in the United States, which emphasizes conservative economic policies, strong national defense, and varying stances on social issues.