Question

In: Finance

Credit risk puts both the principal loaned and expected interest payments at risk. As a result,...

Credit risk puts both the principal loaned and expected interest payments at risk. As a result, FIs issue financial claims that have a risk–return profile with
A. high probability of fixed upside return
B. high probability of large downside risk
C. low probability of large downside risk
D. both high probability of fixed upside returns and low probability of large downside risk

Solutions

Expert Solution

D. both high probability of fixed upside returns and low probability of large downside risk

the above is answer..

this reduce the risk of losses to the FIs

jeff jeffy answered 2 years ago
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