Which of the Following Is Correct with Regard to Collateral

question 53

Multiple Choice

Which of the following is correct with regard to collateral?

• A) It refers to business (but not personal) assets that a borrower uses to secure a loan or other credit.
• B) It consists of tangible assets like buildings as well as intangible assets like goodwill.
• C) Collateral can be seized by the lender if the loan is not repaid according to specified terms.
• D) It refers to personal (but not business) assets that a borrower uses to secure a loan or other credit.
• E) Banks are most impressed with debt investment.

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Definitions:

Minimum AVC

The lowest point of the average variable cost curve where each unit of production is at its cheapest.

Short Run

A period during which at least one factor of production is fixed, leading to limitations in output adjustment.

Long Run

A period of time in which all factors of production and costs are variable, allowing for full industry adjustment to changes.

Minimum ATC

This refers to the lowest point on the average total cost curve, representing the most efficient scale of operation for a firm.