Bank Loss Mitigation Strategies Quiz
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Questions and Answers

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?

  • 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?

  • Based on historical observations
  • Based on both historical observations and external data (correct)
  • Based on external data
  • Based on borrower's resources

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