Why Is Liquidating Collateral Not a Preferred Means of Loan

question 12

Multiple Choice

Why is liquidating collateral not a preferred means of loan repayment?

• A)The bank must manage the repossessed collateral until it is sold.
• B)Transaction costs on liquidating collateral are often quite high.
• C)Bankruptcy laws may prevent liquidation to occur in a timely manner.
• D)All of the above.
• E)b.and c.only

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