Which of the Following Statements Is FALSE

question 103

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) A 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.

---

Definitions:

Total Resistance

The overall opposition to electric current flow in a circuit, calculated by adding the resistance values of individual resistors in series and appropriately combining resistors in parallel.

Parallel Circuit

An electrical circuit in which components are connected in parallel, such that the voltage across each component is the same, and the total current is the sum of the currents through each component.

Parallel Circuit

An electrical circuit in which components are connected across common points or junctions, allowing current to divide among the paths.

10 Ω

A specific resistance value, indicating an electrical component or circuit offers ten ohms of resistance to the flow of electric current.