Lenders require collateral to
A. reduce the risk of default.
B. control the borrowing firm.
C. reduce the losses if the borrower defaults.
D. extend to the borrower an unsecured loan.
Answer:C
Lenders require collateral to
A. reduce the risk of default. B. control the borrowing firm. C. reduce the losses if the borrower defaults. D. extend to the borrower an unsecured loan.