8010 Exam Dumps | Which of the following does not affect the credit risk facing a lender institution?

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PRMIA.8010.v2022-06-27.q87
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Question 22/87

Which of the following does not affect the credit risk facing a lender institution?

A. The state of the economy

B. The applicability or otherwise of mark tomarket accounting to the institution

C. Credit ratings of individual borrowers

D. The degree of geographical or sectoral concentration in the loan book

Correct Answer: B

Explanation
The state of the economy, credit quality of individual borrowers and concentration risk are all factors that affect the credit risk facing a lender. Mark to market accounting does not change the credit risk, or the underlying economic reality facing the institution. Therefore Choice 'b' is the correct answer.

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