Which of the Following Statements Involving the Promised Return on a Loan

question 53

Multiple Choice

Which of the following statements involving the promised return on a loan is NOT true?

• A)Credit risk may be the most important factor affecting the return on a loan.
• B)Compensating balances reduce the effective cost of loans for the borrower because the deposit interest rate is typically greater than the loan rate.
• C)Compensating balances represents the portion of the loan that must be kept on deposit at the bank.
• D)Compensating balance requirements provide an additional source of return for the lending institution.

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Definitions:

Circulatory System

The body system that circulates blood throughout the body, delivers nutrients and oxygen to cells, and removes waste products, encompassing the heart, blood vessels, and blood.

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Polar bears are large, carnivorous bears found primarily in the Arctic region, well adapted to cold temperatures with their thick fur and fat layers.

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In multicelled organisms, set of interacting organs that carry out a particular body function.

Quantitative Results

Outcomes of an experiment or research that are measurable and can be expressed in numerical values.