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Question
Which statement regarding risk evaluation of international loan is NOT correct?a. An analysis of both the borrower and borrower's country is done by the bank's foreign lending and economic departments.
b. Evaluation involves a statistical analysis of the country's political and economic risks.
c. Since the accounting standards in different countries vary, a financial analysis of the borrower is not needed.
d. If the cost of doing the analysis internally is too high, bank can use outside information sources. However, they should not be treated as reliable as the internal sources.
e. The higher the cost of gathering information, the higher the loan rate, reflecting the increased risk due to unreliable information or lack of information.
Answer
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Related questions
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d. The U.S. Treasury Department Act
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