Collateral does not reduce the risk of a loan per se, because A. it is not part of the loan agreement B. the risk of a loan is determined by the borrower’s willingness and ability to repay the loan C. it may be worth less than the bank thinks D. the bank may not have title to the collateral

Collateral does not reduce the risk of a loan per se, because A. it is not part of the loan agreement B. the risk of a loan is determined by the borrower’s willingness and ability to repay the loan C. it may be worth less than the bank thinks D. the bank may not have title to the collateral

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter21: Supply Chains And Working Capital Management

Section: Chapter Questions

Problem 6Q

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Question

Collateral does not reduce the risk of a loan per se, because
A. it is not part of the loan agreement
B. the risk of a loan is determined by the borrower’s willingness and ability to repay the loan
C. it may be worth less than the bank thinks
D. the bank may not have title to the collateral

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