| Consider the following Statements regarding 'Take-Out Financing': |
| 1. It is for infrastructure projects which have long gestation period. |
| 2. It helps to prevent any possible asset-liability mismatch. Which of the above Statement(s) is/are correct? |
A) Only 1
B) Only 2
C) Both 1 and 2
D) neither 1 nor 2
Correct Answer: C
Solution :
[c] Take-out financing is a method of providing finance for longer duration projects of about 15 years by banks sanctioning medium-term loans for 5-7 years. It is given that the loan will be taken out of books of the financing bank within pre-fixed period by another institution, thus preventing any possible asset-liability mismatch. After taking out the loan from banks, the institution could off-load them to another bank or keep it.
You need to login to perform this action.
You will be redirected in
3 sec
