Banks Can Reduce Their Default Risk by Restructuring Their Asset

question 56

Multiple Choice

Banks can reduce their default risk by restructuring their asset portfolio to contain less ____ and more ____.

• A)Treasury bonds; corporate bonds
• B)Treasury bonds; municipal bonds
• C)Treasury bonds; commercial loans
• D)none of the above

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Definitions:

Vapor

Gaseous phase of a substance that is generally a liquid or solid at room temperature.

Solute

A substance dissolved in another substance, typically the component of a solution present in the lesser amount.

Solvent

A substance that dissolves a solute, resulting in a solution; solvents are often liquids but can also be solid or gas.

Vapor Pressure

The pressure exerted by the vapor of a liquid (or solid) at equilibrium with its condensed phases at a given temperature in a closed system.