Lines of Credit and Long-Term Relationships Between Banks and Their

question 34

Multiple Choice

Lines of credit and long-term relationships between banks and their customers

• A) reduce the costs of information collection.
• B) make it easier for banks to screen good risks from bad.
• C) enable banks to deal with moral hazard contingencies that are neither anticipated nor specified in restrictive covenants.
• D) do all of the above.
• E) do only A and B of the above.