Loans that are used to fill a gap in the time until a specific event occurs are called a. evergreen facilities b. bridge loans. c. term loans d. floor plans.
Loans that are used to fill a gap in the time until a specific event occurs are called a. evergreen facilities b. bridge loans. c. term loans d. floor plans.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Loans that are used to fill a gap in the time until a specific event occurs are called
a.
evergreen facilities
b.
bridge loans.
c.
term loans
d.
floor plans.
If a bank has gross charge-offs of $25 for the current year, recoveries of $40, and provision for loan losses of $30, how much will the reserve for loan losses change?
a.
$45
b.
$+15
c.
none of the above.
d.
$-15
Which of the following is a non-installment loans? There may be more than one correct answer.
a.
term loan
b.
single payment loans
c.
bridge-loans
d.
closed-end leases
The _____ ratio gives actual losses on loans, while the ______ ratio gives the extent to which the bank’s assets are devoted to loans.
a.
loss rate; capitalization
b.
loss rate; loan risk
c.
loan risk; loss rate
d.
operating efficiency; loan risk
Expert Solution
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Introduction:
The loans can be either used in the creation of assets using securitization or it can be sold to the new owners itself. When loans are sold to the new owners, they are termed as loan sales. Loan sales is pursued by various financial institutions having a variable size.
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