Which of the Following Statements Is True

question 48

Multiple Choice

Which of the following statements is true?

• A)The annual all-in-spread (AIS) measures annual fees earned on the loan by the FI less the annual spread between the loan rate paid by the borrower and the FI's cost of funds.
• B)The annual all-in-spread (AIS) measures annual fees earned on the loan by the FI plus the annual spread between the loan rate paid by the borrower and the FI's cost of funds.
• C)The annual all-in-spread (AIS) measures annual fees earned on the loan by the FI plus the loan rate paid by the borrowers.
• D)The annual all-in-spread (AIS) measures annual fees earned on the loan by the FI less the FI's cost of funds.

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Definitions:

Second Purchase

The act of buying a product or service for the second time after the initial purchase.

Goodwill

An intangible asset that arises when a buyer acquires an existing business, representing the value of the business's reputation, brand, and other non-physical assets.

Acquisition Differential

The difference between the cost of acquiring an entity and the fair value of its identifiable net assets.

Voting Shares

Shares that give the stockholder the right to vote on matters of corporate policy making and the election of the board of directors.