Multiple Choice
Which of the following is NOT a contractual mechanism used by FIs to control credit risks?
A) Diversifying across different types of risky borrowers.
B) Requiring higher interest rate spreads for higher risk borrowers.
C) Requiring more collateral for the bank over the assets of more risky borrowers.
D) Making lending decisions only in centralized locations.
Correct Answer:
Verified
Correct Answer:
Verified
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