A loan commitment obligates the seller to lend a prespecified amount to a prespecified customer at prespecified terms. It is a binding agreement between the lender and the borrower, and both parties are legally obligated to uphold the terms of the commitment.

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A Loan Commitment

Question 12

Multiple Choice

A loan commitment

A) gives its seller the right to lend a prespecified amount to a prespecified customer at prespecified terms.
B) obligates its seller to lend a prespecified amount to a prespecified customer at prespecified terms.
C) gives its buyer the flexibility of renegotiating a loan contract with its seller.
D) only a and c
E) only b and c

Correct Answer: