Answer the following statements true (T) or false (F)
1. Secured short-term financing has specific assets pledged as collateral.
2. The security agreement is an agreement between the borrower and the lender that specifies the collateral held against a secured loan.
3. Fixed assets are the most desirable short-term-loan collateral since they normally have a longer life, or duration, than the term of the loan.
4. 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.
5. Commercial finance companies are lending institutions that make only unsecured loans-both short-term and long-term—to businesses.
1. TRUE
2. TRUE
3. FALSE
4. TRUE
5. FALSE
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