Post Utme Bowen University 2023 Commerce Question 24

Practice objective / multiple choice question 24 from the 2023 Post Utme Bowen University Commerce examination.

Post Utme Bowen University 2023 Commerce Objective / Multiple Choice
Question 24 POST_UTME_BOWEN_UNIVERSITY • 2023 • COMMERCE • objective

A bank is considering offering a new type of loan product to its customers. The loan product would have a variable interest rate that is tied to the prime lending rate. Which of the following is the most appropriate way for the bank to manage the risk associated with this loan product?

Answer Options

A. Use a credit scoring model to assess the creditworthiness of borrowers
B. Require borrowers to make regular payments based on a fixed schedule
C. Offer a fixed interest rate to borrowers
Correct Answer D. Use a hedging strategy to manage interest rate risk
Correct Answer
D
Correct Option:
Use a hedging strategy to manage interest rate risk

About This Question

This is Post Utme Bowen University 2023 Commerce Question 24. It is one of the objective questions from the 2023 Post Utme Bowen University Commerce examination.

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