11-52 From the perspective of an FI,which of the following is an advantage of a floating-rate loan?
A) Stable interest payments will be received throughout the loan period.
B) The pre-specified interest rate remains in force over the loan contract period no matter what happens to market rate.
C) The bank can request repayment of a loan at any time in the contract period.
D) The default risk is completely eliminated.
E) The interest rate risk is transferred to the borrower.
Correct Answer:
Verified
Q38: 11-25 Adjusting interest rates,fees,and other terms upward
Q39: 11-38 In terms of rating agencies such
Q40: 11-28 Generally,at the retail level,an FI controls
Q41: 11-41 The cumulative default probability of a
Q42: 11-54 Which of the following observations concerning
Q44: 11-44 The marginal mortality rate is the
Q45: 11-42 The condition of no arbitrage profits
Q46: 11-50 Which of the following is not
Q47: 11-57 Which of the following is NOT
Q48: 11-46 The payoff function of a loan
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