Which of the Following Situations Is Similar to the Externality

question 53

Multiple Choice

Which of the following situations is similar to the externality effect?

• A)Exercising an adverse material change in conditions clause as a last resort, thereby cancelling or repricing a loan commitment.
• B)Increase in the cost of funds above normal levels while many FIs scramble for funds to meet their commitments to customers during a credit crunch.
• C)In a loan commitment, the borrower takes down only part of the funds over the specified time period.
• D)The buyer of a commercial letter of credit fails to perform as promised under a contractual obligation.

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Definitions:

Temperaments

Inherited traits that influence how one thinks, behaves, and reacts with the environment.

Personalities

The blend of traits or attributes that create a person's unique personality and ways of acting.

Moods

A temporary state of mind or feeling that influences an individual's emotional state, distinct from emotions in that they are less specific and longer-lasting.

Cognitive Development

The study of how thinking, problem-solving, and intelligence evolve as an individual grows from infant to adult.