Interest Rate Risk Is Part of the Loan Commitment Contingent

question 102

True/False

Interest rate risk is part of the loan commitment contingent risk because of the uncertainty of changes in interest rates before the borrower exercises his option to borrow.

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Definitions:

Preexisting Hostility

Hostility or aggression that exists before a particular event or situation; refers to antagonistic attitudes or feelings that are not caused by recent or current events.

Initial Frustration

The initial emotional response of annoyance or anger when confronted with obstacles or challenges that impede progress toward a goal.

Cognitive Neoassociationism

A theory in psychology that explains how thoughts and emotions are interconnected, suggesting that one can indirectly evoke the other.

Aggression Model

A theoretical framework explaining the factors that lead to aggressive behavior in individuals.