If a Bank's Concentration Limit (As a Percentage of Capital)

Multiple Choice

If a bank's concentration limit (as a percentage of capital) is 25.0 percent, and it does not permit a loss of any loan to impact more than 10 percent of its capital, what is the expected recovery on loans that are defaulted?

A) 20 percent.
B) 30 percent.
C) 40 percent.
D) 50 percent.
E) 60 percent.