Which of the Following Is True of Loan Collateral

Multiple Choice

Which of the following is true of loan collateral?

A) Loans secured by collateral always have higher finance charges than unsecured loans.
B) Collateral is an item of value used to secure the principal portion of a loan.
C) Collateral is always required by banks to lend to customers with good credit ratings.
D) Collateral is an item of value used to secure the interest portion of a loan.
E) Loans are secured by collateral that is readily marketable at a price high enough to cover the interest portion of the loan.