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Problematic Loans can be an issue to banks because of, Select one: A. High capital. B....

Problematic Loans can be an issue to banks because of, Select one: A. High capital. B. Loss of income. C. Pricing of loans. D. All of the above. E. No provisions.

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Answer #1

Problematic loan are normal loans, which have turned bad due to some unexpected adverse situations.

These loans can have very high amount of capital as well as loss of income, because they have been earlier priced as a normal loan but now it will have to be structured and dealt with haircut. So pricing of loan is another issue with these problem loans.There would have been no provisions recognised in the book for this kind of loans.

So the correct answer would be 'all of these' because all of the given statement are correct.

Hence, The answer is (D) All of the above.

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