Which of the Following Statements Is False

question 25

Multiple Choice

Which of the following statements is false?

• A)Default risk is the risk that the borrower is willing but unable to fulfil the terms promised under loan contract.
• B)Default risk is the risk that the borrower refinances the loan before maturity.
• C)Default risk is the risk that the borrower is able but unwilling to fulfil the terms promised under loan contract.
• D)Default risk is the risk that the borrower is unable and unwilling to fulfil the terms promised under loan contract.

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Definitions:

IASB/FASB Boards

The International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) are organizations that develop and promulgate accounting standards.

Enhancing Characteristics

Qualitative aspects of financial information that make it more useful for decision making, including comparability, verifiability, timeliness, and understandability.

Financial Information

Data concerning the financial status, performance, and changes in financial position of an entity that is useful to a wide range of users in making economic decisions.

Conceptual Framework Project

A systematic approach to developing a set of concepts that guide the creation, interpretation, and application of financial reporting and accounting standards.