Banking Awareness - Basics Of Banking & Banking Terminology
Which banking risk increases when a large number of borrowers default simultaneously?
Which banking risk increases when a large number of borrowers default simultaneously?
medium Q5 of 15
Step-by-Step Solution
Step 1: Identify default pattern
Many borrowers are failing to repay.Step 2: Match with risk type
This situation directly increases credit risk.Final Answer:
Credit risk → Option AQuick Check:
Multiple defaults amplify credit risk ✅
Quick Trick: Mass defaults = High credit risk.
Common Mistakes:
- Attributing defaults to market risk.
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