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      Question

      By keeping a maximum exposure limits on a sector, a bank

      is trying to minimise -
      A Credit Risk Correct Answer Incorrect Answer
      B Market Risk Correct Answer Incorrect Answer
      C Operational Risk Correct Answer Incorrect Answer
      D Off-Balance sheet Risk Correct Answer Incorrect Answer
      E All of the above Correct Answer Incorrect Answer

      Solution

      Caps on sectors increases diversification of the credit exposure and reduces credit risk, the risk of default.

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