Which of the Following Is Not True of a Loan

question 20

Multiple Choice

Which of the following is not true of a loan that is sold without recourse?

• A)The loan is removed from the FI's balance sheet.
• B)The FI has no explicit liability if the loan eventually goes bad.
• C)The FI that originated the loan bears all the credit risk.
• D)The buyer can put the loan back to the selling FI.

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Definitions:

Concrete Operations

A stage in Jean Piaget’s theory of cognitive development, typically occurring between ages 7 and 12, where children start thinking logically about concrete events.

Cognitive Development

The process of growth and change in intellectual capabilities, such as thought, reason, and problem-solving, that occurs across the lifespan.

Jean Piaget

A Swiss developmental psychologist known for his theory of cognitive development in children, emphasizing stages of growth in intellectual abilities.

Selman's Stage

refers to the stages of perspective-taking ability development as outlined by psychologist Robert Selman, identifying how individuals understand others' thoughts and feelings at different ages.