The Interest Rate on a Collateralized Loan Is Relatively Low

question 87

Multiple Choice

The interest rate on a collateralized loan is relatively low, but one of the disadvantages of such loans is that

• A)the loan must be repaid in a short period of time.
• B)the assets used as collateral are tied up until the loan has been repaid.
• C)the loan is difficult to obtain.
• D)commercial banks do not make such loans.
• E)you ruin your credit rating.

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