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Exam SCR topic 1 question 27 discussion

Actual exam question from GARP's SCR
Question #: 27
Topic #: 1
[All SCR Questions]

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.
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Suggested Answer: D 🗳️
by CASS74 at Sept. 27, 2023, 4:46 a.m.

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KhoaND
5 months, 1 week ago
The question is asking about policy risk so D is best answer
upvoted 1 times
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CASS74
6 months, 1 week ago
Selected Answer: C
Reputation is also a transitional risk.
upvoted 1 times
huanle
5 months, 3 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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