Which of the Following Statements Is False

question 13

Multiple Choice

Which of the following statements is false?

• A) Regardless of the loan structure, the bank may include a compensating balance requirement in the loan agreement that reduces the usable loan proceeds.
• B) Another common type of fee is a loan origination fee, which a bank charges to cover credit checks and legal fees.
• C) Firms frequently use lines of credit to finance seasonal needs.
• D) The commitment fee associated with a committed line of credit is designed to decrease the effective cost of the loan to the firm.

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Definitions:

Behavioral Science

The study of human and animal behavior through observation and experimentation, applying multidisciplinary principles.

Critical-Thinking Methodology

An approach that involves objective analysis and evaluation of an issue in order to form a judgment.

Bias

A prejudice in favor of or against one thing, person, or group compared with another, usually in a way considered to be unfair.

Observing Behaviors

The act of systematically watching and recording the actions and reactions of individuals or groups in order to gather data about specific conduct.