RR1A Practice Test

1Single Choice

Which of the following best describes the primary source of credit risk for a bank when lending to individuals and small businesses?

A.The possibility that market interest rates will move against the bank before loan repayment
B.The borrower's failure to make contractual payments as agreed
C.Losses arising from a settlement failure in a derivatives trade with a corporate counterparty
D.Losses caused by an operational outage at the bank's loan-servicing platform

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