Because of Compensating Balances and Fees Used to Increase Return

question 11

True/False

Because of compensating balances and fees used to increase return on a loan, the credit risk premium is not the fundamental factor driving the promised return once the base rate on the loan has been set.

---

Definitions:

Written Form

Communication or documentation that is expressed in written symbols, such as letters, words, or numbers.

Different Culture

Describes the variations in social norms, practices, beliefs, and values among groups of people from different backgrounds or geographical areas.

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture, often accompanied by a general disdain for other cultures.

Hand Gesture

A hand gesture is a movement or position of the hand and/or arms used to convey an idea, instruction, emotion, or information.