Question

Which of the following is a way to reduce the risk of standby credit letters?

A. Avoid renegotiating the terms of loans of SLC customers

B. Specialize in SLCs issued by the same region and industry

C. Selling participations in standbys in order to share risk with other lending institutions

D. Do not count standbys as loans when assessing the bank's risk exposure

E. All the options are ways to reduce the risk of standby credit letters

Answer

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