Which of the Following Statements Is False

question 27

Multiple Choice

Which of the following statements is false?

• A) The prime rate is the rate banks charge other banks.
• B) With a variable interest rate, the terms of the loan may indicate that the rate will vary with some spread relative to a benchmark rate, such as the yield on one-year Treasury securities or the prime rate.
• C) With a discount loan, the borrower is required to pay the interest at the beginning of the loan period.
• D) A common benchmark rate is the London Inter-Bank Offered Rate, or LIBOR, which is the rate of interest at which banks borrow funds from each other in the London interbank market.

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Definitions:

Legitimate Business Purpose

A reasonable, lawful reason for engaging in a particular business activity or decision.

Uniform Commercial Code

A comprehensive set of laws governing all commercial transactions in the United States, intended to standardize laws across the states.

Unconscionable

A term used to describe an action or a contract clause that is so unjust or overwhelmingly one-sided in favor of one party that it is contrary to good conscience.

Noncompete Clause

A contract provision that prohibits an employee from working for or becoming a competitor for a certain period after leaving a company.