Question
Which of the following statements is FALSE? A. Covenants are restrictions either limiting or encouraging the borrowers actions that affect the probability of repayment. B.
Which of the following statements is FALSE?
A. | Covenants are restrictions either limiting or encouraging the borrowers actions that affect the probability of repayment. | |
B. | FIs often charge real estate loans with the same rate as the cost of collecting information on the borrowers is high. | |
C. | If the amount of compensating balance for a given loan size increases, the effective return on the loan increases for the lending institution. | |
D. | Credit rationing refers to the restriction on the maturities of loans made available to individual borrowers. | |
E. | A spot loan is the one that the borrower takes down the entire amount of the loan immediately. |
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