Which of the following methods is a means of credit risk mitigation?
A) entering into a plain vanilla IRS
B) entering into collateral agreements
C) hedging a portfolio's USD exposure
D) investing only in sizeable and liquid markets

Question

Quizplus · Accepted Answer

Entering into collateral agreements is a method of credit risk mitigation as it provides a form of security or guarantee to the lender in case of default by the borrower. The other options listed are not directly related to credit risk mitigation.

Which of the Following Methods Is a Means of Credit