During the Last Year You Have Had a Loan Commitment

question 58

Multiple Choice

During the last year you have had a loan commitment from your bank to fund working capital for your business. The total line available was $25,000,000, of which you took down $20,000,000. It is now the end of the loan commitment period and your bank is asking you to pay the back-end fees. You have misplaced the paperwork that listed the terms of the commitment, but you know you paid total fees (this does not include any interest paid to borrow the $20,000,000) of $110,000 on this loan commitment. You remember that the back-end fee was 60 basis points. Calculate the front-end fee on this loan commitment.

• A) 60 basis points
• B) 32 basis points
• C) 40 basis points
• D) 16 basis points

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Definitions:

Social Empathy

The ability to understand and share the feelings and perspectives of others within a social context, facilitating compassionate and harmonious interactions.

Intentional Component

An aspect of behavior and actions that is done with purpose or intention, often reflecting deliberate decision-making.

Affective Component

The emotional or feeling segment of an attitude, influencing how individuals feel about an object or situation.

Cognitive Component

Relates to the mental processes involved in understanding, reasoning, and decision-making.