Management of credit risk is achieved through diversification effect by combining numerous loans in a portfolio. t/f

The correct answer is True.

Explanation:

Credit risk is the possible loss that an economic agent assumes as a result of breach of the contractual obligations incumbent upon the counterparties with which it relates. The concept is usually related to financial institutions and banks, but also affects companies and organizations in other sectors.

For its part, risk diversification is a fundamental principle of investment and financial markets. It consists of investing in a wide variety of assets to reduce the total risk of a portfolio or decrease its volatility.

it's actually a very difficult task, due to not many people can make 2 million dollars in 2 years. besides that, to the not-so-realistic ideas, you can create a business. it could be practically anything, but make it into a business that isn't that known yet, you get me? also, lets not forget about stock market. that's where all the good stuff happens. use investments at the beginning and begin to raise up your business or whatever you're going to do. as this is a very non-realistic idea, it's still worth the shot!

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