Which of the following observations concerning floating-rate loans is NOT true?
A) They have less credit risk than fixed-rate loans.
B) They better enable FIs to hedge the cost of rising interest rates on liabilities.
C) They pass the risk of interest rate changes onto borrowers.
D) In rising interest rate environments, borrowers may find themselves unable to pay the interest on their floating-rate loans.
E) The loan rate can be periodically adjusted according to a formula.
Correct Answer:
Verified
Q65: Borrower reputation is important in assessing credit
Q66: Which of the following statements involving the
Q67: Credit scoring models include all of the
Q68: Which of the following factors may affect
Q69: Which of the following is NOT characteristic
Q71: Which of the following is not a
Q72: Credit rationing by an FI
A)involves restricting the
Q73: In making credit decisions, which of the
Q74: Which of the following refers to restrictions
Q75: Which of the following is true of
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents