Post Utme Al Hikmah University 2022 Commerce Question 19

Practice objective / multiple choice question 19 from the 2022 Post Utme Al Hikmah University Commerce examination.

Post Utme Al Hikmah University 2022 Commerce Objective / Multiple Choice
Question 19 POST_UTME_AL-HIKMAH_UNIVERSITY • 2022 • COMMERCE • objective

A bank is considering issuing a new type of loan product that will offer customers a lower interest rate than their current loan products. However, the bank's risk management team is concerned that the new loan product will increase the bank's credit risk. Which of the following is the most likely outcome?

Answer Options

A. The bank will benefit from the new loan product because it will attract more customers and increase revenue.
Correct Answer B. The bank will lose money from the new loan product because it will increase credit risk and lead to defaults.
C. The bank will not benefit from the new loan product because it will not be able to hedge against credit risk.
D. The bank will not lose money from the new loan product because it will be able to manage credit risk effectively.
Correct Answer
B
Correct Option:
The bank will lose money from the new loan product because it will increase credit risk and lead to defaults.

About This Question

This is Post Utme Al Hikmah University 2022 Commerce Question 19. It is one of the objective questions from the 2022 Post Utme Al Hikmah University Commerce examination.

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