When Troubled Debt Is Restructured Via Continuation with Modification of Debt

question 137

Multiple Choice

When troubled debt is restructured via continuation with modification of debt terms,the original loan is

• A)continued but interest and principal payments may be reduced or eliminated.
• B)continued but the repayment schedule may be extended over a longer time period.
• C)continued but the amount of collateral securing the loan is increased.
• D)cancelled and a new loan agreement is signeD.

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Definitions:

Price Supports

Government interventions to maintain the market price of a commodity at a certain level to protect producers from market fluctuations.

Price Floor

A government or regulatory-imposed minimum price for a commodity or service, intended to prevent the market price from falling below a certain level.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or commodity, usually intended to protect consumers.

Purely Competitive Market

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect information.