Because the Bank Guarantees the Availability of Funds, a Commitment

question 149

True/False

Because the bank guarantees the availability of funds, a commitment fee is normally charged on a simple line of credit agreement.

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Definitions:

Money Market Mutual Funds

Investment funds that invest in short-term debt securities, providing investors with high liquidity and a relatively safe investment.

Eurodollars

Deposits held in U.S. dollars at banks outside the United States, used in international transactions and considered an important part of the global money market.

Hang Seng

An index that measures the performance of the largest companies listed on the Hong Kong Stock Exchange, representing various sectors of the economy.

DAX

A blue chip stock market index consisting of the 40 major German companies trading on the Frankfurt Stock Exchange.