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      Question

      Which of the following exposures is granted an explicit

      exemption from standard LEF credit limit caps?
      A Funded commercial real estate construction loans Correct Answer Incorrect Answer
      B Exposure where the principal and interest are fully guaranteed by the Central Government Correct Answer Incorrect Answer
      C Short-term non-derivative spot foreign exchange settlements Correct Answer Incorrect Answer
      D Unsecured equity investments in early-stage non-financial tech start-ups Correct Answer Incorrect Answer
      E Working capital facilities extended to private unlisted entities Correct Answer Incorrect Answer

      Solution

      Exposures backed fully by the sovereign guarantee of the Central Government (where both principal and interest are completely covered) carry negligible credit risk and are officially exempted from large exposure concentration limits.

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