Calculating Fees on a Loan Commitment Calculate the Total Fees

question 41

Multiple Choice

Calculating Fees on a Loan Commitment Calculate the total fees a firm would have to pay when its bank offers the firm the following loan commitment: A loan commitment of $5,000,000 with an up-front fee of 50 basis points and a back-end fee of 20 basis points.The take-down on the loan is 80 percent.

• A)$10,000
• B)$25,000
• C)$27,000
• D)$33,000

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Definitions:

Systematic Desensitization

A behavioral therapy technique used to reduce phobic reactions and anxiety through gradual exposure to the feared object or situation paired with relaxation exercises.

Relationship Patterns

Repeated ways in which an individual interacts and forms connections with others, often based on past experiences.

Cognitive Therapy

A type of psychotherapy focused on changing negative thoughts and beliefs to improve emotional well-being and behavior.

Transference

A psychological phenomenon where emotions, desires, and expectations originally associated with one person are unconsciously transferred onto another person, especially in psychoanalytic contexts.