When banks use specialized resources to monitor borrowers, they are
A) minimizing the cost of assessing borrowers' creditworthiness.
B) lowering the cost of creating liquidity.
C) lending to only high- risk borrowers.
D) pooling risk.

Question

Quizplus · Accepted Answer

When banks use specialized resources to monitor borrowers, they are minimizing the cost of assessing borrowers' creditworthiness. This allows them to make more informed lending decisions and take on less risk, ultimately helping them to be more profitable and efficient in their lending practices.

When Banks Use Specialized Resources to Monitor Borrowers, They Are