Matrix Bank Has Compiled the Following Migration Matrix on Consumer

question 47

Multiple Choice

Matrix Bank has compiled the following migration matrix on consumer loans. Which of the following statements accurately summarizes this data?

• A)Ten percent of grade two loans were upgraded during the year.
• B)Grade one loans have a higher probability of downgrade than grades two or three.
• C)Grade three loans have a higher probability of upgrade than grade two loans.
• D)Grade three loans have a higher probability of downgrade than grade two loans.
• E)All of the above.

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Definitions:

Total Assets

Total assets refer to the sum of all current and non-current assets owned by a company, reflecting the total resources available for use.

Total Liabilities

Total liabilities refer to the sum of all financial obligations a company owes to outside parties, including loans, accounts payable, and mortgages.

Prepaid Insurance

An asset account that reflects payments made for insurance services before the coverage period.

Asset Account

A record in the financial statements that shows the value of a company's assets, including current, fixed, tangible, and intangible assets.