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In the case of RBC, they are exposed to credit risk in many ways as they offer a wide variety of credit-related services and products in Canada and other parts of the world. Some of these services and products include: “asset-backed financing, margin lending, securities lending and project finance loans, credit cards, lines and letters of credit, and residential and commercial mortgages.” RBC is also exposed to credit risk from other activities that do not relate to its products or services. Such activities include: “short-term investments relating to liquidity management and insurance business investment activities...
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