When a bank lends in a narrow geographic area, they are subject to:
A) country risk.
B) concentrated risk.
C) historical risk.
D) charge-off risk.
E) portfolio risk.

Question

Quizplus · Accepted Answer

When a bank lends in a narrow geographic area, they are subject to concentrated risk. This means that the bank is more vulnerable to economic downturns or industry-specific events in that particular area, increasing the risk of default on the loans.

When a Bank Lends in a Narrow Geographic Area, They