Why is it necessary for a business firm to put up collateral when it takes out a bank loan?
A) So that the bank can keep a portion as advance payment on the loan
B) To show the bank that the business is big enough to require the loan
C) So that banks can seize the assets if loan payments are not made as promised
D) So the financial managers know dates of payment
E) So that the accounting people can generate accurate financial statements
Correct Answer:
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