The Fixed Cost of Loan Origination and Servicing Explains Why

question 13

True/False

The fixed cost of loan origination and servicing explains why finance companies prefer small shorter-term loans over large longer-term loans.

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Definitions:

Error

A mistake made in thinking or action that leads to incorrect or unintended results.

Negative Correlation

A relationship between two variables in which one variable increases as the other decreases, indicating an inverse association.

Variable Increases

Situations or conditions where a measurable factor or quantity grows in magnitude or intensity.

Test-retest

A method used in psychological testing where the same test is administered to the same subjects at two different points in time to assess consistency.