A Common Method for Banks to Reduce Their Default Risk

question 80

Multiple Choice

A common method for banks to reduce their default risk is to

• A)specialize in loans to just one or a few particular industries in which they have expertise in assessing creditworthiness.
• B)specialize in loans of companies whose earnings patterns are quite similar over time.
• C)A and B
• D)none of the above

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Definitions:

Operation Manual

A document containing instructions and guidelines on how to perform operations or tasks within an organization or for a specific equipment.

Reciprocal Method

An accounting technique used to allocate support department costs to producing departments, considering the mutual services exchanged between support departments.

Training Department

A specialized group within an organization focused on enhancing employee skills, knowledge, and performance.

Polishing Department

A division within a manufacturing process focused on refining, smoothing, or finishing products or components to specified standards.