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NEW QUESTION: 1
Which of the following does not affect the credit risk facing a lender institution?
A. The state of the economy
B. Credit ratings of individual borrowers
C. The applicability or otherwise of mark to market accounting to the institution
D. The degree of geographical or sectoral concentration in the loan book
The state of the economy, credit quality of individual borrowers and concentration risk are all factors that affect the credit risk facing a lender. Mark to market accounting does not change the credit risk, or the underlying economic reality facing the institution. Therefore Choice 'b' is the correct answer.