12-27 If a Bank's Concentration Limit (As a Percent of Capital)is

question 39

Multiple Choice

12-27 If a bank's concentration limit (as a percent of capital) is 20 percent,and its expected recovery from defaulted loans is 50 percent,what is the maximum loss it permits to affect its capital in the event of a default?

• A)5 percent.
• B)10 percent.
• C)15 percent.
• D)20 percent.
• E)25 percent.

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Definitions:

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