Commercial and Industrial Loans

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What type of loan has an interest rate that is periodically adjusted according to changes in a designated short-term interest rate?

Secured loan

Floating-rate loan (correct)

Unsecured loan

Fixed-rate loan

Which type of loan is used to finance equipment over several years with repayment coming from future profits and cash flows of the borrower?

Long-term asset loan (correct)

Bridge loan

Commercial loan

Seasonal loan

What is the purpose of a bridge loan?

Financing the purchase of real estate

Financing working capital needs over a year

Financing equipment over several years

A business financing agreement with repayment coming from the completion of the agreement (correct)

Which type of loan represents the major loan category of banks?

Commercial and Industrial Loans Signup and view all the answers

What type of loan finances the purchase, construction, and remodeling of both residential housing and commercial facilities?

Real Estate Loans Signup and view all the answers

What is the purpose of a seasonal loan?

Financing working capital needs over a year with repayment coming from the reduction in working capital Signup and view all the answers

What is the primary source of funds for commercial banks?

Customer deposits Signup and view all the answers

What is the major asset of commercial banks?

Loans Signup and view all the answers

What service do commercial banks provide to facilitate the transmission of monetary policy?

Maturity intermediation services Signup and view all the answers

What is the purpose of regulating commercial banks?

To protect against a disruption in the provision of essential services Signup and view all the answers

What is the accounting equation for a commercial bank's balance sheet?

Assets = Liabilities + Capital Signup and view all the answers

What type of deposit liability is characterized by a checking account in which the owner can receive their funds on demand?

Demand Deposit Signup and view all the answers

What is the typical repayment schedule for long-term consumer loans?

Installment basis Signup and view all the answers

What type of loan is often secured by the item purchased?

Long-term Consumer Loan Signup and view all the answers

Which of the following is NOT a type of loan?

Fixed Assets Signup and view all the answers

What is the primary focus of a bank's leasing activities?

Business firms Signup and view all the answers

What is the main purpose of a Commercial and Industrial Loan?

To support business operations and expansion Signup and view all the answers

What is a key factor in determining the interest rate on a loan?

All of the above Signup and view all the answers