BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Lessee, lessor and lender.
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Lessor, commercial bank, and insurance company.
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a and b.
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None of the above.
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Detailed explanation-1: -A leveraged lease is a lease agreement that is financed through the lessor with help from a third-party financial institution. In a leveraged lease, an asset is rented with borrowed funds.
Detailed explanation-2: -The lease involves at least three parties: a lessee, a long-term creditor, and a lessor. The financing provided by the long-term creditor is nonrecourse to the general credit of the lessor and must provide the lessor (the equity investor) substantial leverage in the transaction.
Detailed explanation-3: -A leveraged lease is a tax-advantaged lease arrangement in which a lessor borrows funds to acquire an asset that is then leased to a lessee. In this situation, the lender holds title to the leased asset, while all lessee payments are collected by the lessor and passed to the lender.
Detailed explanation-4: -Operating Lease The lessee uses the asset or equipment for a fixed portion of the asset’s life and does not bear the cost of maintenance.