Question
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?
(Note: This question was officially DROPPED by UPSC in the final answer key — no marks were awarded for it to any candidate.)
Correct Answer — C
Explanation
This question was officially DROPPED by UPSC — no marks were given either way.
For reference: syndicated lending does spread default risk across lenders, but a syndicated loan can actually be structured as either a fixed lump sum or a revolving credit line.