Which of the Following Statements Is FALSE

question 27

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 decreases the effective cost of the loan to the firm.

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Definitions:

Socialism

A political and economic theory advocating for the means of production, distribution, and exchange to be owned or regulated by the community as a whole.

Economic Theories

The body of knowledge concerning the production, consumption, and transfer of wealth, formulated as models and principles that aim to explain economic behaviors and predict outcomes.

Power Distribution

The way in which authority, influence, and resources are allocated and exercised within an organization or society.

Geert Hofstede

A Dutch social psychologist known for his research on cross-cultural groups and organizations, especially for developing the cultural dimensions theory, which identifies how cultures differ across countries.