GARP Financial Risk and Regulation (FRR) Series 2016-FRR Question # 59 Topic 6 Discussion

GARP Financial Risk and Regulation (FRR) Series 2016-FRR Question # 59 Topic 6 Discussion

2016-FRR Exam Topic 6 Question 59 Discussion:
Question #: 59
Topic #: 6

After entering the securitization business, Delta Bank increases its cash efficiency by selling off the lower risk portions of the portfolio credit risk. This process ___ return on equity for the bank, because the cash generated by the risk-transfer and the overall ___ of the bank's exposure to the risk.


A.

Increases; increase;


B.

Increases; reduction;


C.

Decreases; increase;


D.

Decreases; reduction;


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