Which of the Following Statements Is True

question 77

Multiple Choice

Which of the following statements is true?

• A) Unsecured loans generally involve very high interest rates as a result of the free-rider problem.
• B) Unsecured loans generally involve very high interest rates as a result of adverse selection.
• C) Unsecured loans are no longer made; all loans now must have some form of collateral.
• D) Unsecured loans are only made to individuals with very high net worth because it is the only way to limit the risk.

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Definitions:

Current Liabilities

A company's debts or obligations that are due within one year, appearing on the company's balance sheet and including short-term loans, accounts payable, and other similar obligations.

Roadmap

A roadmap is a strategic plan that defines a goal or desired outcome and includes the major steps or milestones needed to reach it. It can apply to project management, product development, or strategic planning.

Running Business

The continuous operation of a company's core activities and functions in the pursuit of generating profits and maintaining sustainability.

Financing Needs

The requirement for funds to cover the startup, expansion, or operational activities of a business.