Exam SCR topic 1 question 27 discussion

Actual exam question from GARP's SCR

Question #: 27
Topic #: 1

A credit loan officer at a commercial bank reviews a loan application from a company engaged in coal-fired power generation. The loan officer examines transition risks associated with the company’s business strategy.
What policy risk driver should the loan officer identify?

A. Prices of solar photovoltaic panels have declined since 2015.
B. Activists and advocacy organizations increasingly file lawsuits against fossil fuel-based power companies.
C. Lending to a coal-fired power plant will hurt the bank’s public image.
D. A government proposes legislation to mandate closure of all coal-fired power plants by 2035.

Show Suggested Answer

Suggested Answer: D 🗳️

by CASS74 at Sept. 27, 2023, 4:46 a.m.

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KhoaND

9 months ago

The question is asking about policy risk so D is best answer

upvoted 1 times

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CASS74

10 months ago

Selected Answer: C

Reputation is also a transitional risk.

upvoted 1 times

huanle

9 months, 2 weeks ago

public image is not directly related to policy; typically, government-initiated activities such as legislations, standards, rules, orders, etc are policies. Therefore, the best answer is D.

upvoted 3 times

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