223-exam-3.docx - 5 Cs of creditonly essay question...

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5 C’s of credit—only essay question Character- a key factor in defining the borrowers willingness to live up to the terms of the loan Capacity- the ability of the borrower to service the loan in a timely fashion Collateral-something of value that’s used to secure a loan and that the lender can claim in case of default Capital- the amount of unencumbered assets owned by the borrower used as another indicator of the borrowers ability to repay the loan Condition-the extent to which prevailing economic conditions could affect the borrowers ability to service a loan True/False One could expect to earn a higher interest rate on a certificate-T Credit union members are expected to have some common bond to be considered a member-T FDIC insures deposits up to 250000 at banks-T Debit card payments can be canceled-F A close ended automobile lease is most popular lease-T When you buy a used car it should be important to get it checked by a mechanic-T The largest single investment will be the largest investment of your life-T
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