When a Small-Business Owner Applies for a Loan, the Bank

question 65

Multiple Choice

When a small-business owner applies for a loan, the bank officer will

• A) turn the loan down unless the firm doesn't need the money.
• B) check to see if the firm has issued corporate stocks or bonds.
• C) reject the loan if the firm has any outstanding debts.
• D) ask the business owner to fill out a loan application.
• E) approve the loan if the firm has never borrowed money from a competing bank.

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Definitions:

Opportunity Cost

The relinquishment of possible rewards from other opportunities when one is selected.

Opportunity Cost

Refers to the benefits one foregoes by choosing one option over another, highlighting the trade-offs inherent in decision-making processes.

Bushel

A unit of volume that is used in the United States for measures of agricultural produce, such as grains, fruits, and vegetables.

Exchange Rate

The price of one country's currency in terms of another currency, determining how much foreign currency can be bought with a unit of the domestic currency or vice versa.