Basis Risk Occurs on a Loan Commitment Because the Spread

question 48

True/False

Basis risk occurs on a loan commitment because the spread of a pricing index over the cost of funds may vary.

---

Definitions:

Premises Guarantee

In logic, the condition where the premises of an argument necessarily lead to its conclusion, ensuring its validity.

Existential Import

The implication that the subjects referred to in a proposition actually exist.

Categorical Syllogism

A form of deductive reasoning consisting of three statements: two premises and a conclusion, each stating a relationship between categories.

Unstated Premise

An unstated premise is an implicit assumption that is not directly expressed within an argument but is necessary for the argument's logic to hold.