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Which of the following is not true about credit default swaps and credit risk? A FI examines creditworthiness of an applicant with the five Cs
Which of the following is not true about credit default swaps and credit risk?
A FI examines creditworthiness of an applicant with the five Cs of credit: character, capacity, collateral, conditions, and capital. | ||
Credit risk can cause a FI to fail. | ||
Credit risk refers to the risk that a FI may not have enough cash to pay back depositors. | ||
Credit default swaps reduce credit risk for FIs. | ||
All of the above are true |
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