Ask Question
BusinessBusiness
29 December, 16:15

Different borrowers have different risks of bankruptcy, and bankruptcy is costly to lenders. Therefore, lenders charge higher rates to borrowers judged to be more at risk of going bankrupt. True / False.

+3
Answers (1)
  1. 29 December, 16:24
    0
    True.

    Explanation:

    Usually all the lenders are dependent on some form of risk pricing and they charge higher rate of interest from the borrowers who has more risk of bankruptcy. The borrowers who has more risk of default will give more interest for same amount as compared to the borrower having less risk of default.

    So based on the above discussion, the statement given in the question is True.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Different borrowers have different risks of bankruptcy, and bankruptcy is costly to lenders. Therefore, lenders charge higher rates to ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Utilty theory serves as a way to
Answers (1)
When customers have their groceries scanned at the supermarket checkout counter, the data are collected and processed by tracking services such as IRI's InfoScan.
Answers (1)
Porches, Inc. sells lawn furniture. Selected financial information for the most recent year is as follows: Beginning merchandise inventory on January 1 was $ 33 comma 100. Ending merchandise inventory on December 31 was $ 35 comma 400.
Answers (1)
Which of the following is an example of an annuity? A fund that invests in technology companies and distributes quarterly dividends for two out of four quarters per year but not always the same quarters A retirement fund set up to pay a series of
Answers (1)
You've just joined a marketing and sales fraternity on campus. At your first meeting you met Robert, who is also a huge Green Bay Packers fan. Robert suggests you get together to watch the game the on Sunday.
Answers (1)
New Questions in Business
A tile manufacturer had the following financial dа ta: Boxes of tile produced and sold 240,000 Sales Revenue $1,280,000 Variable Manufacturing cost $456,000 Fixed manufacturing cost $320,000 Variable selling, general and administrative expense
Answers (1)
Yeaman Company manufactures luggage sets. Yeaman sells its luggage sets to department stores. Yeaman expects to sell 1 comma 850 luggage sets for $ 345 each in January and 2 comma 250 luggage sets for $ 345 each in February. All sales are cash only.
Answers (1)
Button Transportation purchases many pieces of office furniture with an individual cost below $200 each.
Answers (1)
Which of the following statements is most consistent with efficient inventory management? The firm has a: a. low incidence of production schedule disruptions. b. below average total assets turnover ratio. c. relatively high current ratio.
Answers (1)
Units to be Assigned Costs Oak Ridge Steel Company has two departments, Casting and Rolling. In the Rolling Department, ingots from the Casting Department are rolled into steel sheet.
Answers (1)
Home » Business » Different borrowers have different risks of bankruptcy, and bankruptcy is costly to lenders. Therefore, lenders charge higher rates to borrowers judged to be more at risk of going bankrupt. True / False.
Sign Up Forgot Password?