Which of the Following Statements Involving the Promised Return on a Loan

question 66

Multiple Choice

Which of the following statements involving the promised return on a loan is NOT true?

• A)Credit risk may be the most important factor affecting the return on a loan.
• B)Compensating balances reduce the effective cost of loans for the borrower because the deposit interest rate is typically greater than the loan rate.
• C)Compensating balances represents the portion of the loan that must be kept on deposit at the bank.
• D)Compensating balance requirements provide an additional source of return for the lending institution.
• E)Increased collateral is a method of compensating for lending risk.

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Definitions:

Industrial/Organizational Psychologist

Professionals who apply psychological principles to workplace environment, organization, and personnel issues.

Counseling Psychologist

A professional who helps people with physical, emotional, and mental health issues improve their sense of well‑being, alleviate distress, and resolve crises.

Clinical Psychologist

A professional specializing in diagnosing, evaluating, and treating mental, emotional, and behavioral disorders through psychological testing, counseling, and therapy.

Developmental Psychologist

A professional who studies the growth and development of the human mind and behavior throughout life.