Management of risk is crucial to the profitability of banks

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The management of risk is crucial to the profitability of banks.

1. What are the most important risk management principles that involve approving loans?

2. What is Adverse Selection? What is Moral Hazard? Why do they make the underwriting process for lending more complicated?

3. Is the loan approval process different in Western/International banks in comparison to Islamic banks? Explain with examples.

Reference no: EM13987307

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