Standby Letters of Credit

question 82

Multiple Choice

Standby letters of credit

• A)are a form of swaps.
• B)are a promise by a bank to lend the borrower funds to pay off its maturing commercial paper.
• C)are a promise by a large depositor to provide additional funds to a bank should the bank face an unexpectedly large deposit outflow.
• D)represent the unused balance on a bank credit card.

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Definitions:

Contract Changes

Amendments or modifications to the terms and conditions of an existing agreement.

Behavior Cost

The non-financial costs associated with actions or decisions, including effort, time, and opportunity costs that impact individuals' or companies' behaviors.

Market Signal

Information that is passed on to the market which, intentionally or unintentionally, conveys messages to buyers and sellers.

Babysitting Course

A structured program designed to educate individuals, typically teenagers, in the care and safety of young children when providing babysitting services.