A $200 Million Loan Commitment Has an Up-Front Fee of 20

question 27

Multiple Choice

A $200 million loan commitment has an up-front fee of 20 basis points and a back-end fee of 25 basis points on the unused portion. If 50 percent of the commitment is drawn down, the back-end fee is

• A)$250,000.
• B)$4,000,000.
• C)$400,000.
• D)$775,000.
• E)$375,000.

---

Definitions:

Relative Value

The importance or worth of something in comparison to other items, based on its utility, rarity, or desirability.

Sales Commission

A sales commission is an incentive paid to salespeople.

National Security Agency

A U.S. government agency tasked with worldwide surveillance, gathering, and analyzing information and data for overseas intelligence and counterespionage functions.

PRISM Program

A surveillance program by the United States National Security Agency (NSA) that collects internet communications from various U.S. internet companies.