| Why is the offering of 'teaser loans' by commercial banks a cause of economic concern? |
| 1. The 'teaser loans' are considered to be an aspect of sub-prime lending and banks may be exposed to the risk of defaulters in future. |
| 2. In India, the 'teaser loans' are mostly given to inexperienced entrepreneurs to set up manufacturing or export units. |
| Which of the statement(s) given above is/are correct? |
A) Only 1
B) Only 2
C) Both 1 and 2
D) Neither 1 nor 2
Correct Answer: A
Solution :
Exp. [a] 'Teaser loans', which has a feature of lending at lesser premium interest rates in the beginning and later incrementing them heftily after a certain period, are at present given to credit worthy home buyers.
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