Question: What are the characteristics of a loan commitment that an FI may make to a customer? In what manner and to whom is the commitment

What are the characteristics of a loan commitment that an FI may make to a customer? In what manner and to whom is the commitment an option? What are the various possible pieces of the option premium? When does the option or commitment become an on-balance-sheet item for the FI and the borrower?

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A loan commitment is an agreement to lend a fixed maximum amount of money to a firm ... View full answer

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