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:

Sociologist

An expert in the study of society and social relationships, analyzing patterns of social interactions and the organization of groups.

Modern Society

A term referring to societies characterized by industrialization, technological progress, and secular values.

Preceding Societies

Refers to societies that existed before the current or a specific era, often studied to understand historical development and cultural evolution.

Negative Effects

Unintended detrimental outcomes or impacts resulting from an action, policy, or event.