Which of the Statements Below Is FALSE

question 20

Multiple Choice

Which of the statements below is FALSE?

• A)No part of the default premium has to do with the frequency of default by the borrower.
• B)For the home loan,the collateral (the house)is an asset that will increase in value over time (in general)compared to a car loan where the collateral (the car)decreases in value over time.
• C)With a house,the potential loss due to default is less than a car because the growing value of the asset should be sufficient to cover the outstanding balance (principal)of the loan.
• D)A personal credit card essentially has no collateral so the potential loss is even higher if the customer defaults on his or her credit card payments.

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Definitions:

Good Performance

The act of achieving or exceeding the set standards of tasks or goals in a workplace or educational setting.

Performance Measures

Quantitative or qualitative indicators used to evaluate and track the efficiency, productivity, or success of an individual, team, or organization's outputs.

Deficient

Lacking in some necessary quality or element; insufficient or inadequate.

Contaminated

Refers to substances that are impure or polluted, often posing a risk to health or the environment.