GS PrelimsEconomyBanking2024

Consider the following statements: 1. Statement-I: Syndicated lending spreads the risk of borrower default across multiple lenders. 2. 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

Correct Answer: Option X

Explanation

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