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pshichka [43]
3 years ago
7

Why do banks and other financial institutions require collateral for loans?

Social Studies
2 answers:
stich3 [128]3 years ago
5 0

Answer: The answer is C: to reduce the risk of lending

Banks and other financial institutions require collateral for loans to reduce the risk of lending.

Explanation:

Collateral refers to anything or an item of value which is accepted as a substitute form of repayment in case loan is not repaid. It is an asset can be taken if an individual fail to pay his or her loan. If the individual fails to repay the loan, the bank will seize and sell the assets. It is a legal binding contract.

Arlecino [84]3 years ago
3 0

If the borrower stops making the promised loan payments, the lender can seize the collateral to recoup its losses. Since collateral offers some security to the lender should the borrower fail to pay back the loan, loans that are secured by collateral typically have lower interest rates than unsecured loans.


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If you can make your own state who would make, enforce, and interpret the laws for your country
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Before we start talking about federalism, take a moment and see if you can count the number of government entities that have jurisdiction over the place you are right now.

What did you come up with? One? Three? More than that?

Your answer might differ quite a bit depending on where you are. You might be obligated to abide by the laws of your country, your state, your province, your district, your county, your city, or your town. In some countries, a citizen might be governed by three or more layers of government. In others, they might only be governed by a single national government.

In the United States, the two major layers of government are at the state and national levels. This system, where more than one layer of government has jurisdiction over the same territory, is called federalism. Although it seems natural to US citizens that government is divided into multiple layers, in fact, there are only 15 federal republics in the world.

In the United States, the federalist system emerged because the states evolved from separate colonies, which had diverse populations and different needs. The Framers of the Constitution envisioned that state governments, not the national government, would be the main unit of government for citizens on a day-to-day basis. i hope it was helpful

Explanation:

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