What Must Be in Place in Order for a Lender

question 46

Multiple Choice

What must be in place in order for a lender to appoint a receiver or manager in the event of default on a commercial operating loan?

• A) a deficiency of assets
• B) a specific security agreement
• C) a general security agreement
• D) an acceleration clause

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Definitions:

Face Value

The nominal or original value stated on a coin, banknote, security, or any other financial instrument, without accounting for inflation, interest, or any other market factors.

Interest Rate

The percentage at which interest is paid by borrowers for the use of money they borrow from a lender.

Reserve Requirement

The portion of depositors' balances that banks must have on hand as cash, a regulation set by central banks to ensure liquidity.

Deposit Multiplier

The ratio that describes the potential increase in bank deposits that can result from an increase in banks' reserves through the fractional reserve banking system.