Assume a Bank Makes a Loan Commitment to the Value

question 17

Multiple Choice

Assume a bank makes a loan commitment to the value of $10m at a fixed interest rate of 10 per cent p.a. for a period of one year. Assume the borrower only uses 50 per cent of the provided funds over the course of the year. If the bank charges a back-end fee of 0.5 per cent, what is the additional revenue the bank would generate?

• A) None, unless the loan is prepaid early.
• B) $2500
• C) $25 000
• D) $5000

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Definitions:

Morale Values

Principles or beliefs that an individual considers important and that guide their behavior and decision-making.

Media Violence

The representation of violent acts and situations in various forms of media, and its potential impact on audience behavior and attitudes.

Aggression

Behavior intended to harm or intimidate others, which can be physical, verbal, or indirect, and is driven by various emotional and environmental factors.

Weapons Effect

The tendency for the presence of firearms to increase the likelihood of aggression, especially when people are frustrated.