12-56 Suppose Kansas Bank wants to ensure that its maximum loss on a secured (collateralized) loan is 10 percent (as a percent of capital) .If it wishes to keep a concentration limit at 40 percent for secured loans,what is the estimated amount lost per dollar of defaulted secured loan?
A) 40 cents.
B) 35 cents.
C) 30 cents.
D) 25 cents.
E) 20 cents.
Correct Answer:
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