Challenger App

No.1 PSC Learning App

1M+ Downloads
Which of the following is true about “Credit Risk Mitigation” techniques used by commercial banks?

AIt involves transferring risk entirely to the borrower

BIt includes measures like collateral, guarantees, and credit derivatives

CIt refers to avoiding lending to risky sectors altogether

DIt is unrelated to the bank’s capital adequacy requirements

Answer:

B. It includes measures like collateral, guarantees, and credit derivatives

Read Explanation:

.


Related Questions:

Collateral-free loans under KCC are available up to what limit?
When financial loss is likely to occur, such risk is known as ----.
Which is the odd one out
--- endorsement is an endorsement made by an authorized person on behalf of another.
A type of loan given by one bank to another bank is ....?