Which of the Following Statements Is True

question 17

Multiple Choice

Which of the following statements is true?

• A)Loan contracts are bank debt contracts that generally have longer term to maturity than bond contracts.
• B)The longer term nature of loans allows the financial intermediary to exercise more monitoring power and control over the borrower.
• C)When bank loan contracts are sufficiently long term, the banker almost becomes like an insider to the firm.
• D)None of the listed options are correct.

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Definitions:

Business Relationships

The connections and interactions between companies and individuals in a professional context, often aimed at achieving mutual goals.