How do banks minimize the risk of loss to depositors?

Name: How do banks minimize the risk of loss to depositors?
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Question

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By making many different loans to different borrowers, banks spread the risk. If they only made one large loan to one borrower and that borrower has difficulty paying it back, the bank could suffer a significant loss. By making many small loans to different borrowers, the bank reduces the impact of any individual loan defaulting.

How Do Banks Minimize the Risk of Loss to Depositors