Question

Why would an organization want to know what the role of a credit portfolio is?

Answer 1

Organisation should be knowing the role of the credit portfolio because it will be reflecting the organisational overall credit exposure and it will also reflect the various rate sensitive issues which has been issued by the company so the company should be trying to keep all these exposures in check in order to have a better amount of liquidity and understanding of external environment effect on its organisation so it will have the business in order to proactively create value in the long run.

organisation should be knowing the role of the credit portfolio as it will be providing with various types of debt instrument issues like corporate bonds which has been issued by the company and it will also help the company in order to hedge with various exposures and proactively manage the risk associated with adversity in the economic environment and hence the organisation will be able to take advantage through management of credit portfolio in a better manner which will be reflecting upon maximization of the value of the organisation. These credit portfolio will be having a very high influence on the overall activities of the organisation because credit cannot be separated from the activities of the organisation and it is continuously used by the organisations in order to enhance and magnify their profits so it need to be controlled proactively.