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? (a). Both Statement-I and Statement-II are correct and Statement-II explains Statement-I (b). Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I (c). Statement-I is correct, but Statement-II is incorrect (d). Statement-I is incorrect, but Statement-II is correct Explanation: Statement I is accurate. The core principle of syndicated lending is to distribute the risk of a borrower default among multiple lenders. By participating in the syndicate, each lender assumes only a portion of the total loan, reducing their individual exposure. Statement II is incorrect. Syndicated loans can indeed be structured as both fixed amounts (lump sums) and credit lines. The specific structure dep…
