Post Utme Eksu 2022 Commerce Question 7

Practice objective / multiple choice question 7 from the 2022 Post Utme Eksu Commerce examination.

Post Utme Eksu 2022 Commerce Objective / Multiple Choice
Question 7 POST_UTME_EKSU • 2022 • COMMERCE • objective

A bank is considering a new loan product that offers a variable interest rate tied to the prime lending rate. The bank's risk management team is concerned about the potential risks associated with this product, including the risk of interest rate volatility and the potential for borrowers to default on their loans. Which of the following is the most appropriate way for the bank to manage these risks?

Answer Options

Correct Answer A. Implement a hedging strategy to mitigate interest rate risk
B. Increase the interest rate margin to compensate for potential losses
C. Conduct thorough credit analysis on borrowers to assess their creditworthiness
D. Limit the loan amount to a specific percentage of the borrower's income
Correct Answer
A
Correct Option:
Implement a hedging strategy to mitigate interest rate risk

About This Question

This is Post Utme Eksu 2022 Commerce Question 7. It is one of the objective questions from the 2022 Post Utme Eksu Commerce examination.

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