Which of the Following Reasons for Considering Long-Term Loans Inherently

question 44

Multiple Choice

Which of the following reasons for considering long-term loans inherently more risky thanshort-term loans is most accurate?

• A) There is a greater chance that a borrower will default in a longer time frame.
• B) The loan values are very sensitive to changes in market interest rates.
• C) The penalties for closing out a long-term loan early make them unattractive to many investors.
• D) Long-term loans typically have ongoing costs that accumulate over the life of the loan.

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