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Question
Which of the following is not a characteristic of a loan commitment?
A. The maximum amount of the loan is negotiated at the time of the loan agreement.
B. The interest rate on fixed-rate loans is determined at the time of the loan is actually taken down.
C. Floating-rate loans transfer the interest rate risk to the borrower.
D. The time period for which the loan is available is negotiated at the time of the loan agreement.
E. In a floating-rate loan the borrower pays interest rate in force when the loan is actually taken down.
Answer
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