Commercial banks and other institutions do not normally consider secured loans less risky than unsecured loans, and therefore require higher interest rates on them.

Question

Quizplus · Accepted Answer

The statement is true. Commercial banks and other institutions generally consider secured loans less risky as they have collateral to fall back on in case of default. However, they still require higher interest rates on these loans to compensate for the cost of the collateral and the administrative expenses involved in managing secured loans.

Commercial Banks and Other Institutions Do Not Normally Consider Secured