Question

In credit risk management, a duration limit is

Duration limits help control interest rate sensitivity by capping the weighted average maturity of portfolios, minimizing volatility and risk.

established to:

A Restrict banks from offering long-term loans

B Control excessive volatility in interest rate-sensitive assets

C Define the maximum repayment period for retail loans

D Set a cap on the total exposure to credit risk in a sector

E Ensure a company’s cash flows match its loan repayment schedule

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