The Purpose of Collateral in a Secured Loan Agreement Is

question 49

Multiple Choice

The purpose of collateral in a secured loan agreement is to:

• A)reduce the lender's risk.
• B)reduce the expense of administering the loan.
• C)make borrowers indifferent to the default risk of the loan.
• D)increase the rate borrowers are willing to pay for funds.

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Definitions:

Illustrators

Nonverbal behaviors or gestures that accompany speech and help convey meaning or emphasize points.

Affect Displays

Visible manifestations of emotion through facial expressions, body movements, and vocal tone.

Regulators

Nonverbal cues or behaviors that control, coordinate, or maintain the flow of communication within an interaction.

Adaptors

Nonverbal behaviors or actions often performed unconsciously in response to stress or discomfort, such as fidgeting or adjusting clothing.