If the Amount Lost Per Dollar on a Defaulted Loan

question 49

Multiple Choice

If the amount lost per dollar on a defaulted loan is 40 percent, then a bank that does not permit the loss of a loan to exceed 10 percent of its bank capital should set its concentration limit (as a percentage of capital) to

• A)5 percent.
• B)15 percent.
• C)25 percent.
• D)30 percent.
• E)50 percent.

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