At-the-point approaches tend to be:
A. countercyclical.
B. procycyclical.
C. neither counter- nor procyclical because they rarely change.
D. neither counter- nor procyclical because they change randomly.
Answer:B
Banks often downgrade a bond or company just as it has reached a trough in the cycle, and this restricts the credit to the company just when it could use it to resume growth. Also, banks will upgrade a company near an economic peak and extend it more credit just when the firm should be expecting slower growth.