Question

The Terrell State Bank is a small bank located in Guyman, Oklahoma. All of its loans are agriculture and small business loans in Guyman. It wants to buy a municipal bond from the state of South Carolina. What type of risk is it likely trying to reduce with this purchase?

A. Credit risk

B. Interest-rate risk

C. Business risk

D. Call risk

E. Prepayment risk

Answer

This answer is hidden. It contains 1 characters.