Explicit provisions in a loan agreement that prohibit the borrower from engaging in certain activities is called:
A) credit rationing
B) restrictive covenants
C) credit-risk analysis
D) adverse selection
B
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The price of an airline ticket from Denver to Chicago costs $450. A bus ticket costs $150. Traveling by plane takes 2 hours compared with 32 hours by bus. Other things constant, Erica would gain by choosing air travel if, and only if, she values her time at more than
A) $5 per hour. B) $300 per hour. C) $10 per hour. D) $9.38 per hour.
A $1,000 bond, which matures in one year, has a price of $925. The interest rate on this bond is
A) 7.5%. B) 8.11%. C) 9.25%. D) 9.20%.
Commercial bank reserves are an asset to commercial banks but a liability to the Federal Reserve Bank holding them.
Answer the following statement true (T) or false (F)
What are two strategies that entrepreneurs use to earn more than the normal profit? Will these strategies earn economic profits that normally persist over time? Explain
What will be an ideal response?