If Lenders Think That a Particular Borrower Might Default,they Will

question 6

Multiple Choice

If lenders think that a particular borrower might default,they will demand:

• A)a higher interest rate to make it worth taking that risk.
• B)a lower interest rate to make it worth taking that risk.
• C)a higher interest rate to decrease the amount of risk incurred.
• D)a lower interest rate to decrease the amount of risk incurred.

---

Definitions:

Systematic Account

An organized method or approach to recording financial transactions or accounts that follow a consistent procedure.

Outcomes

The results or effects that stem from certain actions, processes, or behaviors.

Sales-Cost Ratio

A metric used to evaluate the effectiveness of sales efforts by comparing the cost of achieving sales to the amount of sales generated.

Overnight Trips

Short travel or journeys that involve staying away from home for one night, often for business or leisure purposes.