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Question
Which of the following observations concerning concentration limits is not true?
A. Limits are set by assessing the borrower's current portfolio, its operating unit's business plans, its economists' economic projections, and its strategic plans.
B. FIs set concentration limits to reduce exposures to certain industries and increase exposures to others.
C. When two industry groups' performances are highly correlated, an FI may set an aggregate limit of less than the sum of the two individual industry limits.
D. FIs may set aggregate portfolio limits or combinations of industry and geographic limits.
E. Bank regulators in recent years have limited loan concentrations to individual borrowers to a maximum of 30 percent of a bank's capital.
Answer
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Related questions
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