During the Last Year You Have Had a Loan Commitment

question 71

Multiple Choice

During the last year you have had a loan commitment from your bank to fund working capital for your business. The total line available was $10,000,000, of which you took down $9,125,000. It is now the end of the loan commitment period and your bank had you pay the back-end fees. You have misplaced the paperwork that listed the terms of the commitment, but you know you paid total fees (this does not include any interest paid to borrow the $9,125,000) of $31,100 on this loan commitment. You remember that the back-end fee was 85 basis points. Calculate the front-end fee on this loan commitment.

• A) 31 basis points
• B) 28 basis points
• C) 26 basis points
• D) 24 basis points

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Definitions:

Genetic Bases

The underlying genetic makeup or foundation that contributes to the physical or behavioral traits of an organism.

Big Five Personality Traits

A model outlining five broad dimensions used to describe human personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Retrospective Analysis

A method of research that involves looking back at historical data or events to understand patterns or outcomes.

Illusion of Causality

The cognitive bias that leads people to mistakenly believe a relationship between two events exists when none does.