Which of the Following Is Not a Characteristic of a Loan

question 5

Multiple Choice

Which of the following is not a characteristic of a loan commitment?

• A)The maximum amount of the loan is negotiated at the time of the loan agreement.
• B)The interest rate on fixed-rate loans is determined at the time of the loan is actually taken down.
• C)Floating-rate loans transfer the interest rate risk to the borrower.
• D)The time period for which the loan is available is negotiated at the time of the loan agreement.
• E)In a floating-rate loan the borrower pays interest rate in force when the loan is actually taken down.

---

Definitions:

Pairs

A term that can refer to two related or matched items or elements, commonly used in various contexts.

Cost Curve

is a graphical representation of how the cost of producing varies with different levels of output, typically including curves like average cost and marginal cost.

Output

The quantity of goods or services produced by a firm or industry.

Short Run

A period in economics during which at least one factor of production is fixed, constraining the firm's capacity to adjust to changes in demand or supply.