Which of the following is true of risk pooling?
A) The cost of default by a single borrower usually outweighs the pro?table proceeds from risk pooling.
B) Risk pooling can lead to a bank failure if a single borrower defaults.
C) Risk pooling allows banks to fund projects that are too risky for a single individual.
D) Risk pooling involves choosing a correlated set of risks.
Correct Answer:
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