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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:

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