To Compensate for the Uncertainty of Future Interest Rates and the Fact

question 152

Multiple Choice

To compensate for the uncertainty of future interest rates and the fact that the longer the term of a loan the higher the probability that the borrower will default, the lender typically ________.

• A) charges a higher interest rate on long-term loans
• B) reserves the right to change the terms of the loan at any time
• C) includes excessively restrictive debt provisions
• D) reserves the right to demand immediate payment at any time

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Definitions:

Unionize

The process by which workers form or join a union to collectively negotiate with their employer over wages, benefits, and working conditions.

Railway Labor Act

A U.S. federal law enacted in 1926 to prevent interruptions to interstate commerce by providing for the settlement of disputes between railroads and their workers.

Government Mediation

The intervention by government agencies or officials to facilitate the resolution of a dispute between parties, typically in labor disputes.

Collective Bargaining

The negotiation process involving management and worker unions aiming to establish agreements on salary scales, conditions of employment, benefits, and other components of labor compensation and rights.