Which of the Following Is True of an 'Adverse Material

question 91

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.
• E)It is exercised frequently by most FIs.

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Definitions:

Hallucination

A sensory experience of something that does not exist outside the mind, often seen, heard, or felt.

Anxiety Reaction

An emotional and physiological response to stress characterized by feelings of tension, worried thoughts, and physical changes like increased blood pressure.

Obsession

An intrusive and persistent thought, urge, or image that repeatedly enters the mind, often causing distress.

Manic Episode

A period of abnormally elevated or irritable mood, increased energy, and other specific symptoms that significantly impact functioning, associated with bipolar disorder.