Author Question: To compensate for the uncertainty of future interest rates and the fact that the longer the term of ... (Read 13 times)

asan beg · **on:** Jul 11, 2018

To compensate for the uncertainty of future interest rates and the fact that the longer the term of a loan the higher the probability that the borrower will default, the lender typically ________.

A) charges a higher interest rate on long-term loans
B) reserves the right to change the terms of the loan at any time
C) includes excessively restrictive debt provisions
D) reserves the right to demand immediate payment at any time

Question 2

The ________ from the sale of a security are the funds actually received from the sale after ________.

A) gross proceeds; adding the after-tax costs
B) gross proceeds; reducing the flotation costs
C) net proceeds; reducing the flotation costs
D) net proceeds; adding the after-tax costs