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Questions and Answers
Which option does the bank have in case of default to reduce its loss?
Which option does the bank have in case of default to reduce its loss?
- Make recourse on the balance sheet of the borrower
- Seize the borrower's resources
- Make recourse on third-party protections
- Seize the collateral received from the borrower (correct)
What can the bank do to recover its loss in case of default?
What can the bank do to recover its loss in case of default?
- Seize the borrower's resources
- Make recourse on third-party protections (correct)
- Make recourse on balance sheet of borrower
- Seize the collateral received from the borrower
How can the bank estimate RR and DPs?
How can the bank estimate RR and DPs?
- Based on historical observations
- Based on both historical observations and external data (correct)
- Based on external data
- Based on borrower's resources
