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      Question

      During a bank audit, the auditor detects a sudden

      increase in sanctioned loans in March without corresponding disbursements. What risk does this signal?
      A Liquidity Risk Correct Answer Incorrect Answer
      B Credit Risk Correct Answer Incorrect Answer
      C Window Dressing Correct Answer Incorrect Answer
      D Profitability Risk Correct Answer Incorrect Answer
      E Market Risk Correct Answer Incorrect Answer

      Solution

      Window dressing refers to manipulating accounts or figures to present a better financial position. Sanctioning loans without intent to disburse before closing books is a red flag.

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