Which of the Following Is Not a Characteristic of a Loan

question 5

Multiple Choice

Which of the following is not a characteristic of a loan commitment?

• A)The maximum amount of the loan is negotiated at the time of the loan agreement.
• B)The interest rate on fixed-rate loans is determined at the time of the loan is actually taken down.
• C)Floating-rate loans transfer the interest rate risk to the borrower.
• D)The time period for which the loan is available is negotiated at the time of the loan agreement.
• E)In a floating-rate loan the borrower pays interest rate in force when the loan is actually taken down.

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Definitions:

Bailment

The temporary placement of control over, or possession of personal property by one person, the bailor, into the hands of another, the bailee, for a specific purpose.

Personal Property

All types of property other than real estate, including movable assets like cars, electronics, and furniture.

Agreement

A mutual understanding or arrangement between two or more parties, often formalized by a contract.

Bailment

The legal relationship where one party, the bailor, temporarily hands over control of property to another, the bailee, for a specific purpose.