Question 2

Consumer loans differ from commercial loans in all of the following ways except:

a.

consumer loans are generally larger than commercial loans.

b.

consumer loans in some states are still covered by usury laws.

c.

consumer loans are generally more expensive to administer on a unit basis than commercial loans.

d.

individuals are more likely to default than businesses.

e.

consumer loans are generally for longer terms than commercial loans.

Question 5

Credit cards are profitable for banks because many customers are price sensitive.

True

False

Question 17

Loan covenants:

a.

put constraints on the borrowers.

b.

are limited to positive provisions.

c.

are seldom enforced in practice.

d.

often lead to the lenders bankruptcy.

e.

protect the borrower from lender interference in management.