Basis Risk Occurs on a Loan Commitment Because the Spread

question 48

True/False

Basis risk occurs on a loan commitment because the spread of a pricing index over the cost of funds may vary.

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Definitions:

Influences

Factors or agents that have an effect on the development, behavior, or decisions of individuals or systems.

Environment

Every nongenetic influence, from prenatal nutrition to the people and things around us.

Learned Associations

Connections made in the mind between two experiences or ideas, which can influence thoughts, feelings, and behaviors.

Habitual Behaviors

actions that are regularly performed as part of one's routine, often without conscious thought due to repetition over time.