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      Question

      Which of the following best describes credit risk

      mitigation?
      A Writing off loans Correct Answer Incorrect Answer
      B Increasing interest rates Correct Answer Incorrect Answer
      C Taking collateral or guarantees Correct Answer Incorrect Answer
      D Approving higher limits Correct Answer Incorrect Answer
      E Delaying disbursement Correct Answer Incorrect Answer

      Solution

      Credit risk mitigation involves reducing the lender’s potential loss through security, guarantees, or insurance.

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