From the perspective of an FI, which of the following is an advantage of a floating-rate loan?
A. Stable interest payments will be received throughout the loan period.
B. The pre-specified interest rate remains in force over the loan contract period no matter what happens to market interest rates.
C. The bank can request repayment of a loan at any time in the contract period.
D. The default risk is completely eliminated.
E. The interest rate risk is transferred to the borrower
Ans: E. The interest rate risk is transferred to the borrower
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Which of the following is true of product costs?
A) They are expensed in the period they are paid. B) For external reporting, GAAP requires that they be expensed before the products are sold. C) They are first recorded in an inventory account. D) For merchandising companies, product costs do not include freight costs.
Which of the following is true of the influence of economic development on consumer preferences?
A. The level of economic development does not impact consumer preferences as much as cultural difference does. B. Firms based in highly developed countries do not build extra performance attributes into their products. C. Consumers in less developed nations demand to have extra attributes built into products. D. Consumers in developed countries are often willing to sacrifice their preferred attributes for lower prices. E. Consumers in developed nations are willing to pay more for products that have additional features customized to their tastes.