Managerial monitoring efficiency and credit risk management strategies affect the shape of the risk of the loan return distribution.

Question

Quizplus · Accepted Answer

Managerial monitoring efficiency, such as the ability of the management to identify and mitigate credit risks, and credit risk management strategies, such as diversification of loan portfolio and setting appropriate credit limits, can impact the distribution of loan return risk. Effective risk management practices can reduce the probability of default and minimize the impact of credit losses, resulting in a more stable and predictable loan return distribution curve.

Managerial Monitoring Efficiency and Credit Risk Management Strategies Affect the Shape