GARP 2016-FRR Exam - Topic 3 Question 19 Discussion

Actual exam question for GARP's 2016-FRR exam

Question #: 19
Topic #: 3

[All 2016-FRR Questions]

A credit analyst wants to determine a good pricing strategy to compensate for credit decisions that might have been made incorrectly. When analyzing her credit portfolio, the analyst focuses on the spreads in each loan to determine if they are sufficient to compensate the bank for all of the following costs and risks EXCEPT.

AThe marginal cost of funds provided.

BThe overhead cost of maintaining the loan and the account.

CThe inherent risk of lending to this borrower while providing a return on the risk capital used to the support the loan.

DThe opportunity cost of risk-adjusted marginal cost of capital.

Show Suggested Answer

Suggested Answer: D

by Tayna at May 05, 2026, 07:09 PM

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