Consider the following statements: Statement-I: Syndicated lending spreads the risk of borrower default across multiple lenders. Statement-II: The syndicated loan can be a fixed amount/lump sum of funds, but cannot be a credit line. Which one of the follo

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Submitted by examrobotsa on

Q: 65 (IAS/2024)
Consider the following statements:

Statement-I:
Syndicated lending spreads the risk of borrower default across multiple lenders.

Statement-II:
The syndicated loan can be a fixed amount/lump sum of funds, but cannot be a credit line.

Which one of the following is correct in respect of the above statements?

question_subject: 

Economics

question_exam: 

IAS

Statement-I is correct as syndicated loans involve multiple lenders, reducing default risk. Statement-II is correct in stating that syndicated loans can be fixed amounts, but typically are not credit lines. However, Statement-II does not explain Statement-I.