Which of the Following Is True of an 'Adverse Material

question 28

Multiple Choice

Which of the following is true of an 'adverse material change in conditions clause' used in a loan commitment?

• A)It allows the FI to cancel or reprice a loan commitment.
• B)It protects the lender against takedown risk.
• C)It protects the lender against basis risk.
• D)Exercise of the clause helps defaulted borrowers.

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Definitions:

Severe Pain

An intense level of discomfort that typically requires medical evaluation and management.

Fractured Leg

A break in one or more of the bones in the leg, which can vary in severity from hairline fractures to complete breaks that require surgical intervention.

Accountability

The responsibility of someone or a group to explain their conduct, assume responsibility for it, and make the consequences known openly.

Correct Assessment

The accurate evaluation or appraisal of a condition or situation based on established criteria or evidence.