The Duration of a Soon to Be Approved Loan of $10

question 109

Multiple Choice

The duration of a soon to be approved loan of $10 million is four years.The 99^th percentile increase in risk premium for bonds belonging to the same risk category of the loan has been estimated to be 5.5 percent. What is the capital (loan) risk of the loan if the current average level of interest rates for this category of bonds is 12 percent?

• A)-$550,000.
• B)-$1,564,280.
• C)-$1,964,280.
• D)-$2,000,000.
• E)-$2,200,000.

---

Definitions:

Modeling

Process of learning behaviors by imitating others, especially authority figures or people like oneself.

Behavioral Treatment

A range of therapies designed to change harmful behaviors using reinforcement and cognitive techniques.

Fear of Dogs

Also known as cynophobia, it is an intense and persistent fear of dogs, often resulting from a negative experience or conditioning.

Blood-injection-injury Phobias

An intense irrational fear of blood, injections, or injuries that can result in physical reactions such as fainting.