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A Key Difficulty That Banks Encounter in Lending to Foreign

Question 71

Multiple Choice

A key difficulty that banks encounter in lending to foreign governments is that


A) governments insist on paying below-market interest rates.
B) governments raise most of their money in financial markets and are rarely interested in taking out bank loans.
C) governments prefer to borrow from domestic banks.
D) the credit risk involved is higher than with private lending.

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