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The Jennings Bank of Texas wants to protect itself from credit risk by making la

ID: 2716120 • Letter: T

Question

The Jennings Bank of Texas wants to protect itself from credit risk by making large loans to corporate customers, by making residential mortgages to families, by making agriculture loans to farmers and ranchers in the area, by making small business loans to business along main street and by making automobile loans for the car dealership across the street from the bank. What defense against risk is this bank making?

Increasing owners’ capital

Quality management

Geographic diversification

Portfolio diversification

All of the other responses are correct

A.

Increasing owners’ capital

B.

Quality management

C.

Geographic diversification

D.

Portfolio diversification

E.

All of the other responses are correct

Explanation / Answer

D) Portfolio diversification

by this redusing the rik of that bank

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