Lenders Recognize That Holding Collateral Can Reduce Losses If the Borrower

question 55

True/False

Lenders recognize that holding collateral can reduce losses if the borrower defaults, but the presence of collateral has no impact on the risk of default.

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Definitions:

Evolved Module

A brain structure or function that developed over time through natural selection to solve specific problems related to survival and reproduction.

Survival Threats

Situations or conditions that pose significant risk to the continued existence or well-being of an individual or species.

Operant Conditioning

A learning process in which the strength of a behavior is modified by reinforcement or punishment.

Classical Conditioning

An educational method where two stimuli are consistently associated with each other, resulting in a reaction initially triggered by the second stimulus being subsequently triggered by the first stimulus alone.