Different borrowers have different risks of bankruptcy,and if a borrower goes bankrupt,its lenders will probably not get back the full amount of funds that they loaned.Therefore,lenders charge higher rates to borrowers judged to be more likely to go bankrupt.

Question

Quizplus · Accepted Answer

The statement is true. Lenders assess the risk of bankruptcy for each borrower and charge higher interest rates to those with higher risks to compensate for the potential losses.

Different Borrowers Have Different Risks of Bankruptcy,and If a Borrower