Different Borrowers Have Different Risks of Bankruptcy, and Bankruptcy Is

question 23

True/False

Different borrowers have different risks of bankruptcy, and bankruptcy is costly to lenders.Therefore, lenders charge higher rates to borrowers judged to be more at risk of going bankrupt.

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Definitions:

Cardiovascular Disease

A class of diseases that involve the heart or blood vessels, including coronary artery disease, hypertension, heart failure, and stroke.

Endocrine Gland

A gland that secretes hormones directly into the blood or tissue fluid instead of into ducts. Compare with exocrine gland.

Exocrine Gland

A gland that excretes its products through a duct that opens onto a free surface, such as the skin (e.g., sweat glands). Compare with endocrine gland.

Pancreas

A gland in the digestive and endocrine systems of vertebrates that produces digestive enzymes and hormones, including insulin.