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When an FI Sells the Loan of an Individual Corporation

question 14

True/False

When an FI sells the loan of an individual corporation in the secondary market, the corporation's stock often decreases in value.


Definitions:

Loan Terms

Loan terms are the specific conditions and details agreed upon by the lender and borrower, including interest rate, repayment schedule, and duration of the loan.

Amortized Loan

A loan with scheduled periodic payments that cover both principal and interest over the loan's term until it is paid off at maturity.

Monthly Mortgage Payment

The amount paid by a borrower to a lender each month, which includes principal and interest on a mortgage loan.

Borrowed

Borrowed refers to funds or items taken on loan from another party, which are expected to be returned or paid back under agreed-upon conditions.

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