πŸ“’ Too many exams? Don’t know which one suits you best? Book Your Free Expert πŸ‘‰ call Now!


    Question

    XYZ Bank Ltd specializes in granting loans to firms in a

    specific line of business. Which of the following is true in this case?
    A Bank would decrease its operating cost and decrease its credit risk Correct Answer Incorrect Answer
    B Bank would increase both its operating cost and its credit risk Correct Answer Incorrect Answer
    C Bank would increase its operating cost and decrease its credit risk Correct Answer Incorrect Answer
    D Bank would decrease its operating costs and increase its credit risk Correct Answer Incorrect Answer
    E none of the above Correct Answer Incorrect Answer

    Solution

    Specialisation can reduce operating cost due to economies of scale. However credit risk may increase due to concentration risk.

    Practice Next
    More Financial Management Questions

    Relevant for Exams:

    ask-question

    Not sure which exam is best for you Talk to our expert

    Get My Free Call