The textbook discusses several alternative defenses banks have against risk.These defenses include:
A)quality management.
B)portfolio diversification.
C)geographic diversification.
D)deposit insurance.
E)All of the options are correct.

Question

Quizplus · Accepted Answer

All of the options listed are viable defenses against risk for banks. Quality management and portfolio diversification are both internal strategies that banks use to manage risk. Geographic diversification helps banks spread their risk across a range of different regions, reducing the impact of any one regional downturn. Deposit insurance provides an external safeguard for depositors, ensuring that even if a bank fails, depositors' accounts will be protected up to a certain amount.

The Textbook Discusses Several Alternative Defenses Banks Have Against Risk