New Enroll in RBI Grade B New Batch - Starts on May 21

    Question

    What role does a merchant bank play in the process of

    'syndicating a loan'?
    A They negotiate the interest rate for a loan on behalf of the borrower. Correct Answer Incorrect Answer
    B They provide a loan on behalf of the government to the borrower Correct Answer Incorrect Answer
    C They help organize a group of lenders to provide a large loan, which no single lender could provide alone Correct Answer Incorrect Answer
    D They underwrite the loan and guarantee its repayment. Correct Answer Incorrect Answer
    E They act as an intermediary between the borrower and bond investors Correct Answer Incorrect Answer

    Solution

      They help organize a group of lenders to provide a large loan, which no single lender could provide alone. Loan syndication involves a group of lenders coming together to provide a large loan that one lender alone could not finance. Merchant banks help organize and manage these syndicates, structuring the loan and negotiating terms.

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