Banks attempt to screen out the good credit risks

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Reference no: EM13984464

Banks attempt to screen out the good credit risks from the bad credit risks to reduce the incidence of loan defaults. To do this, banks do all of the following except:

A. Banks expend resources to acquire accurate credit histories of their potential loan customers.

B. Banks specialize in lending to certain industries or regions.

C. Banks hold excess reserves.

D. Banks diversify their lending portfolios.

E. Banks write restrictive covenants into loan contracts.

Reference no: EM13984464

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