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    Business
  3. Study Set
    Financial Institutions Management Study Set 2
  4. Exam
    Exam 11: Credit Risk II: Loan Portfolio and Concentration Risk
  5. Question
    Financial Institutions Do Not Use Options to Hedge Credit Risk
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Financial Institutions Do Not Use Options to Hedge Credit Risk

Question 1

Question 1

True/False

Financial institutions do not use options to hedge credit risk exposures as credit risk is a natural risk that comes with the core activities of the bank, namely lending.

Correct Answer:

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