Final answer:
The statement given is True. The statement that no additional lender approvals are necessary if the borrower has been approved in advance for a loan is true. The correct multiple-choice option is (a).
Step-by-step explanation:
The statement given is True. In financial markets, a lender may provide a lending tool known as a pre-approved loan. Once a borrower has been pre-approved, there's no need for additional lender approvals to extend the credit. This pre-approval process typically includes a thorough assessment of the borrower's creditworthiness, which allows the bank to decide in advance whether the borrower is eligible for the loan.
Verification steps normally include checking the borrower's income sources, conducting a credit check, and potentially requiring a cosigner or collateral. The benefit of this is that a local bank doesn't need significant extra funds on hand to make a loan, as it plans to hold the loan only briefly before selling it, which allows it to pool the loan into a financial security.The correct multiple-choice option is (a).