The size of a loan and its issuance costs (as a percentage of the amount borrowed) are ________.

Question

Quizplus · Accepted Answer

The size of a loan and its issuance costs are inversely related. This means that as the size of the loan increases, the percentage of issuance costs decreases. Conversely, as the size of the loan decreases, the percentage of issuance costs increases. This is because larger loans generally involve less risk for the lender, so they are willing to charge lower fees.

The Size of a Loan and Its Issuance Costs (As