Which of the Following Is NOT True of a Loan

question 54

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:

Break-Even Point

The point at which total costs equal total revenues, indicating that a business is neither making a profit nor incurring a loss.

Sales Mix

The combination of different products or services that a company sells, impacting its overall profitability and performance.

Income Tax Rate

The percentage at which an individual or corporation is taxed on their income.

Relevant Range

The range of activity within which the assumptions about fixed and variable costs in cost-volume-profit analysis are valid.