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1.
When banks make loans to other financial institutions, they focus on loans to other commercial banks.
False. Banks may make loans to other commercial banks and to other types of financial institutions, including finance companies and insurance companies.
2.
Which of the following is an example of a long-term project loan?
A loan to construct a new power plant. A loan to construct a large, complex facility probably would be a long-term project loan.
3.
A mortgage loan generally may be repaid over a period of up to _____ years.
30. Though 40-year mortgages do exist, they are not offered by all lenders. Thirty years is the most common maximum.
4.
Installment loans require the borrowers to repay the loans all at once.
False. Installment loans are repayable over time in two or more consecutive payments, while a non-installment loan is repayable in one lump sum upon maturity.
5.
Sometimes a business may lease equipment from a commercial financial institution instead of a retailer or other supplier.
True. In some cases, the customer may buy the item after the lease has ended.