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With Respect to the Size of a Loan

Question 63

Multiple Choice

With respect to the size of a loan:


A) the larger the loan the better the economies of scale with respect to loan administration costs per dollar borrowed.
B) the greater the risk to the lender because larger loans result in less diversification.
C) there is a risk trade-off associated with net administrative costs.
D) all of the above
E) (a) and (b) only

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